One Person Company – The Government of India introduced the One Person Company or OPC concept which is way much better option than sole proprietorship for the budding entrepreneurs. OPC gives entrepreneur complete control over the company and at the same time it reduces the liability. If you wish to explore this option and are willing to understand how to establish One Person Company, read further.

Features of One Person Company (OPC)

As mentioned above One Person Company is the hybrid of Sole Proprietorship and Company form of business. Here are the features of the OPC:

1. It only has one person as shareholder or member.
2. A shareholder shall nominate someone else as a shareholder who will take his position in case of death or incapacity of the shareholder.
3. It can have 1 to a maximum of 15 directors.
4. OPC can either be a company limited by share or company limited by guarantee or it can also be an unlimited company.

Minimum Requirements, terms and restrictions to establish

1. It shall have only 1 shareholder
2. Minimum 1 director mandatory
3. The director and the shareholder can be the same person
4. The shareholder shall nominate some else as shareholder
5. There is no minimum capital requirement to establish One Person Company.
6. OPC has to be suffixed with the name of the OPC to identify it as One Person Company.
7. Only an Indian resident or an Indian citizen is eligible to incorporate OPC and can become a nominee of the OPC.
8. An OPC cannot be converted or incorporates under Sec-8 of the Act.
9. An OPC cannot carry out Non-Banking Financial Activities.
10. An OPC cannot convert into any kind of company until its 2 years have expired from the date of its incorporation of OPC, the only exception to this case is when the annual turnover exceeds Rs.2 crores or its threshold limit exceeds 50 lac.

Steps to incorporate OPC

1. Get the DSC or Digital Signature Certificate for the director(s)
2. Get the DIN or Director Identification Number
3. Choose the name of the company and apply for the same at Ministry of Corporate Affairs
4. Drafting of MOA (Memorandum of association) and Article of Association (AOA)
5. Sign all the documents and submit wit with the ROC or Registrar of Company.
6. Make the fee payment to the Ministry of Corporate Affairs and pay the stamp duty as well.
7. Documents are screened by the ROC or Register of Company
8. Receipt of the certificate of incorporation