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OPC registration

Legal Requirements and Compliance for OPC Registration: What You Need to Know

July 18, 2024 by Team Instabizfilings

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OPC or One Person Company is a concept in India to promote entrepreneurship and encourage micro, small, and medium enterprises (MSMEs). OPC was introduced in India under the company ACT in 2013, which enables the company to be owned and managed by a single individual. It has various benefits as it gives a single person sole proprietorship of the company, giving them the company's legal protection. If a person already has a business or plans to start one, they must go through the OPC registration process to register their company. This article will take you through OPC registration's legal requirements and compliance.

 

What Are the Benefits of OPC Company Registration?

 

Before we understand the process of OPC registration and requirements, let's take a look at some of the advantages of an OPC (One Person Company). In traditional company partnerships, the board members decide for the company, whereas, in an OPC, a single person controls the company's decisions. He can also have a board of directors, but they have limited rights when making corporate decisions. Here are some of the advantages of an OPC, especially in comparison to the characteristics of private company:

 

  • Control of the firm: One of the primary benefits of the one-person company is that it allows greater control over the firm, where an individual has various flexibility to run the business. The shareholders are the sole decision-makers in partnerships like LLP of Limited Liability Partnership firms.

 

  • Taxation Benefits: The companies operating under OPC have tax benefits as the government treats them as separate entities. Partnership firms, or LLPs, have a higher tax rate than OPC, making it a viable option for small and medium-sized businesses.

 

Small or Medium-sized companies with OPC registration can have various other advantages when raising capital from investors. These companies can have shareholders of up to 200 members. Moreover, these companies can borrow from banks and other financial institutions.

 

Requirements for the Registration and OPC Compliances

 

The individual or the company with a single owner who wishes to register their company under OPC in India has to fulfill certain criteria. Here, we have highlighted the requirements that will help you make your registration process easier: 

 

  • Single Director and Shareholder: For OPC company registration, the company has to have a single individual responsible for the operation of the company. The individual must have 100% of the company's ownership.

 

  • Director's Resident: The individual or the company director should be an Indian citizen or resident of India for the past 182 days.

 

  • Trademark Name: The company's trademark should be registered with a unique name. The name proposed during the time of registration should not match the existing trademark as it can cause conflict, and the name/trademark should registered with the patent office of India (Ministry of Commerce & Industry)

 

  • Nominee Appointment: The OPC company or the individual must name a nominee in case of the director's incapacity. During the time of OPC registration, the consent and declaration of the nominee must be obtained.

 

  • Registered Office: The individual's company registered office should be located in India.

 

  • Minimum Capital: There are no requirements for OPC to have a minimum capital; however, they should obtain some statement or proof during registration. It is advisable to check the OPC company registration office during registration.

 

  • Information and Documents: The individual or the director of the company needs to submit the necessary documents such as identification proof, address proof, passport-size photographs, PAN card, and other relevant information.

 

  • Payment of Fees: After the document submission process is completed, the individual has to pay the processing fee for the registration process to be completed.

 

Compliance in One-Person Companies

 

The company operating under OPC must comply with the guidelines, as the government can impose a penalty if it fails. Here is the list of compliances required by the director or the company operating under OPC:

 

  • Even though an OPC is not required to hold an AGM every year, the board must meet at least twice yearly.

 

  • Tax returns, company annual reports, Form DIR-3 KYC for director KYC, and other financial statements are all things that need to be filed every year.

 

  • Depending on what it needs, each OPC must follow the rules and regulations for tax deduction at source (TDS), (GST), provident fund (PF), and employee's state insurance scheme of India (ESI).

 

  • To start a business within 180 days of incorporation, you must complete Form INC-20A.

 

  • Stamp duty must be paid on share certificates within 60 days of the shares being given out.

 

  • If a corporation owes money to MSMEs and has been more than 45 days since the due date, it must submit an E-form MSME-I (half-yearly return).

 

  • Every year, an E-form DPT-3 (return of deposits) must be submitted with information about all loans and payments due on March 31 of that fiscal year.

 

  • Company directors must complete form MBP-1 before the first board meeting or during a change.

 

  • Form DIR-8 needs a document from the director every year that they are eligible.

 

Any company that falls under the category of OPC fails to comply with the terms of the government and may face serious penalties or even imprisonment. This can also damage the company's reputation, affecting the brand name and resulting in corporate failure.

 

Instabiz Filings: Your Path to Legal Success

 

If you are searching for OPC company registration, look no further than Instabiz Filings. We are the leading consultancy for providing comprehensive legal services related to OPC registration and guidance for compliance. Our end-to-end solution will give you a hassle-free experience related to documentation, registration, and legal guidance.

 

To start your registration, visit our website or contact us today.

 


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