One Person Company (OPC) Registration.

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Features of Private Limited Company.

• Easy Succession: Despite having a single person running all the daily activities of the company, OPC provides options for perpetual succession. After the demise of a member of the company, the nominee can run the company.

• Limited Liability: The member in a one-person company has limited liability. Since OPC is a registered company it is treated as a separate legal entity providing greater protection to its members. The liability of the member is limited to their shares so they are not liable for any losses conducted in the company. In case of bankruptcy, the creditors can sue the company and not the director of the company for procuring the company's debt.

• Sole Directorship and Shareholder: In one person company registration a single member acts as a director so they stand liable for managing the company's day-to-day activities. In this case, there is no need for an executive director to run the daily needs. A single member is more than sufficient and acts as a shareholder with all responsibilities.

• Ownership in Property: Since the OPC is treated as a separate legal entity the person has the right to hold property related to business and other assets in their name. The properties including machinery factories, residential property, buildings, and other assets cannot be claimed by another person. As per law, the one person company registration can acquire property directly under its name.

Tax Implications for OPC

One Person Companies (OPCs) enjoy the same corporate tax status as Private Limited Companies (PLCs) in India. This means they are subject to a flat 30% tax rate on their net profits, along with Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) as applicable. However, there are some specific tax considerations for OPCs:

• No Dividend Distribution Tax (DDT): If the sole shareholder of an OPC chooses not to draw any dividends, no DDT is applicable. This can be a tax advantage compared to PLCs, where DDT is levied on distributed profits even if the shareholder is the same.

• Perquisite Taxation: The value of perquisites provided to the sole director of an OPC, such as car allowances or mobile phone bills, is taxable as part of their salary income. This is similar to the treatment of perquisites for employees in any company.

• Fringe Benefit Tax (FBT): If the OPC provides any fringe benefits to its employees, such as free meals or club memberships, these are subject to FBT at a flat rate of 30%.

• Goods and Services Tax (GST): OPCs registered under GST must comply with the same filing and compliance requirements as any other registered business. The GST rate applicable to the OPC's goods or services will depend on the specific category.

• Income Tax Return (ITR): OPCs must file their ITR using Form ITR-6, similar to other companies. The deadline for filing ITR is September 30th of each financial year.

• Tax Audits: OPCs with a turnover exceeding Rs. 2 crore in a financial year are required to get their accounts audited by a Chartered Accountant.

Why choose One Person Company.

Advantages

Disadvantages

A private limited company is a one-person operation. It is the world's most well-liked structure. A one-person company can be started by an individual without being limited to having two directors.

OPC is limited to small businesses. Maximum paid-up share capital for OPC is Rs. 50 lakh, and the company must generate Rs. 2 crore in revenue annually to avoid conversion to a private limited company.

Eligiblity and Requirements to Register a Private Limited Company.

Maximum and minimum membership requirements must be met

• There should be a nominee chosen before incorporation

• Use Form INC-3 to request the nominee's approval

• The Companies (Incorporation Rules) 2014 mandate that the OPC name be selected

• Minimum authorised capital of ₹1 Lakh

• DSC of the potential director

• Evidence of the OPC's registered office.

Documents Required for One Person Company Registration

Minimum Requirements for Registration

• Identity and address proofs of the owner/director(s).

• Address proof of the company's registered office.

• Memorandum of Association (MOA) and Articles of Association (AOA) of the company.

• Consent to act as a director from the owner/director(s).

• NOC (No Objection Certificate) from the property owner of the registered office.

Steps Involved In Private Limited Company Registration.

Step 1 : Check the eligibility and documentation

Step 2: Request DSCs and DINs for each director

Step 3: Submit a request for a name reservation Form Spice+ for company incorporation

Step 4: Apply for PAN and TAN for your new business

Step 5: ROC issues an incorporation certificate with a PAN and TAN

Step 6: Open a bank account and start your business.

Why ComplyHub for One Person Company(OPC) Registration

• We submit a name approval application for your sole proprietorship

• Experts at Vakilsearch will draft the MOA and AOA on your behalf, and will file the necessary paperwork with the MCA to be incorporated

• Allocation for PAN and TAN happens simultaneously

• Our team of experts will let you know how your OPC Registration is progressing.

• Basically we have got you completely covered.

Ready for Starting your Journey ?

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Frequently asked questions FAQ`s

What is the difference between OPC vs. LLP vs. Pvt Ltd?

One Person Company (OPC): It has only one shareholder, limited liability, and no requirement for appointing a minimum number of directors. Limited Liability Partnership (LLP): It has two or more partners, each with limited liability for their own actions and the actions of those they supervise. Private Limited Company (Pvt Ltd): It requires a minimum of two shareholders and two directors, offering limited liability and the ability to raise funds through share issuance.

Is OPC public or private?

OPC is a type of private company. It has all the features of a private company with the exception that it can have only one shareholder.

How to register an OPC company in India?

Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN) for the proposed director. Choose a suitable name for the company, adhering to the naming guidelines. Prepare the necessary documents, including MOA, AOA, and address proofs. File the application for OPC registration with the Registrar of Companies (ROC). Pay the required registration fees and stamp duty. Once approved, the ROC will issue a Certificate of Incorporation, and the company will be officially registered.

What are the OPC registration fees?

The OPC registration fees may vary and depend on factors like authorized capital, professional fees, and government charges. It is recommended to check with a Vakilsearch expert.

What is the tax rate for OPC?

The tax rate for an OPC in India is the same as for other private companies. As of my last update in September 2021, the corporate tax rate was 25% for companies with a turnover of up to 400 crore INR and 30% for companies with a higher turnover. Additionally, there might be other applicable taxes depending on the nature of the business and its activities.