One Person Company is a new type of business entity. A private limited company can be formed with a minimum of two directors and shareholders. The directors and shareholders can be same individuals. One person company does away with the requirement of minimum two shareholders. It allows a single entrepreneur to get his business registered as a company and get limited liability protection.

A natural person who is resident in India and Indian Citizen who is living in India for a period of 182 Days is eligible to act as a member and nominee of an OPC ​A person can be only being member of one OPC. ​If a person becomes member or nominee of 2 or more than 2 OPC’s then he has to withdraw his membership from the OPC within 182 days.

Authorized capital is the maximum amount of capital that a company can raise by issuing shares at present or in the future. Authorized capital can be increased later as well if the company wishes to raise funds through the issue of fresh equity. Stamp duty for company registration is paid on the authorized capital.

Whereas, the Paid-up Capital refers to the actual amount paid by the shareholders for issuing shares. One can incorporate a company in India by any amount of paid-up capital which can be less or equal to the authorized capital.

There is no minimum Paid-up capital requirement to start a OPC. However, per the Companies Act, a company needs to keep a minimum Authorised Capital of ₹1 Lac divided into 10,000 equity shares with a face value of ₹ 10 each. Each shareholder must subscribe to at least 1 share to introduce a sufficient amount for running the business. The paid-up capital needs to be deposited in the Current Account of the company as Share Capital.

The Ministry of Corporate Affairs (MCA) has made the new OPC registration a completely online process. All the document flow happens in electronic form and there is no need of any physical presence.

You will need to have exactly the same details on all your documents to incorporate your company.

Once the company is registered, it should fulfill the following requirements on priority:

1. Open a current bank account within 30 days after receiving the PAN card.
2. Appoint First Statutory Auditor for the company.
3. Deposit paid-up capital as mentioned in the MoA of the company.
4. Issue and allot shares to the subscribers.
5. File INC-20A within 180 days of receipt of COI.

The basic mandatory compliance are:

• • Maintenance of proper books of accounts
  • Statutory audit of Financial Statements
  • Filing of business Income tax return every year before 30th Sep
  • Filing Annual ROC return which includes form MGT-7 - Statement of Disclosure of ShareHolders and Directors

Yes, a Private Company can carry multiple businesses within the same field or of similar nature. It should be mentioned in the company’s MoA and approved by a registrar. Though, companies shall not include Activities that are unrelated. For example, fashion designing and event management are very different business activities, and can’t be categorized as the main business activities for the same company.

There is no specific tax advantage to an OPC over any other form. The tax rate is flat 25%, other tax provisions like MAT & Dividend Distribution Tax applies as they apply to any other form of company.

Even though both an OPC and a sole proprietorship have only one person or member, they operate in very different ways. OPC is treated as a company with limited liability and the ability to own assets and property. A sole proprietorship, on the other hand, lacks these characteristics. As a result, there is no perpetual succession in the business, and the sole proprietor bears infinite responsibility.

An OPC can be converted into Private or Public Company upon completing 2 years from the date of Incorporation unless it is a mandatory conversion.