One Person Company

Register a One Person Company

The Companies Act, 2013 introduced a game changer in the form of One Person Company. It is a completely new way of starting a business. It gave the protection of a limited liability company while having a single person ownership. It’s very different from a Proprietorship or partnership firm.

Section 2(62) of Companies Act defines a one-person company as a company that has only one person as to its member. Furthermore, members of a company are nothing but subscribers to its memorandum of association, or its shareholders. So, an OPC is effectively a company that has only one shareholder as its member.

Such companies are generally created when there is only one founder/promoter for the business. Entrepreneurs whose businesses lie in early stages prefer to create OPCs instead of sole proprietorship business because of the several advantages that OPCs offer.

The One Person Company (OPC) is considered as a separate legal entity. As per law, a company is a person, having a common seal, and perpetual succession. It gets the authority to exercise all the functions of an incorporated person.

The concept of limited liability of One Person Company (OPC) in India implies that the liability of the member is up to the extent of his/her share in the company. In an OPC, one person holds the entire share and has complete authority over the operation of the business. So, it can be elucidated that the liability of the person will be to the extent s/he has invested in the business.

An OPC gets its own separate property as it gains its own identity and functions as a separate legal entity. The OPC becomes the owner of its assets, and the members do not have any insurable rights in the assets of the company.

An OPC makes a valid contract with its shareholder or directors. This means as a director you can receive remuneration, as a lessor you can receive rent, as a creditor you can advance money to your own company and earn interest. Directors’ remuneration, rent and interest are a deductible expense which reduce the profitability of the company and ultimately brings down the taxable income of your business.

An OPC is completely controlled and managed by the single owner as the name clearly suggests. It leads to faster decision making and execution.

One person company (OPC) is gaining a lot of popularity as a viable business structure. Large organisations prefer to deal with private limited companies instead of proprietorship firms. Private Limited business structure enjoys corporate status in society which helps the entrepreneur to attract quality workforce and helps to retain them by giving corporate designations, like directorships.

Unique Name

Mainly it builds the company brand and should preferably be a coined word

Business Object

The second part of the name should suggest the business activity of the company

Constitution Type

Name of the company must end with “Private Limited” as a suffix

• Collect list of documents and review
• Application for Digital Signature Certificate
• Checking name availability
• Drafting of MoA, AoA & other required documents
• Name reservation application under SPICE

• Filing company registration application
• DIN allotment application
• Application for PAN and TAN of company
• Government processes