One Person Company Formation Procedure
WHAT IS AN OPC
OPC is defned under section 2(62) of companies act 2013. it is a single promoter having full control over the company while limiting his/her liability to contributions to the business. This person will be the only director and shareholder (there is a nominee director, but with no power until the original director is incapable of entering into contract).The liability of the member is limited to his/her contribution to the business and a single member may take all the decisions.
WHAT THE ELIGIBILITY CRITERIA FOR AN OPC?
The person must be an Indian citizen and resident of India.
The entity must have a nominee.
There can only be one shareholder and director.
The entity must have an average turnover of no more than Rs. 2 crore for the preceding three years.
The authorised capital cannot exceed Rs. 50 lakhs.
PROCEDURE FOR ONE PERSON COMPANY
OBTAINING DIGITAL SIGNATURE CERTIFICATE
The director’s signature is needed on electronic documents. To make this possible, the director in the OPC needs a Class-II Digital Signature Certificate (DSC). This is available from a vendor of any one of the six Certifying Authorities appointed by the MCA, including Tata Consultancy Services, nCode and e-Mudhra.
What you need to submit:
Hard copy of completed Class-II form
Identity Proof: Self-attested copy of PAN card or, in case of foreign national, copy of Passport
Address Proof: Self-attested copy of (any one) Passport/Election/Voter ID/Ration Card/Driver’s License/Utilities Bill/AADHAR Card. If the Utilities Bill (Electricity/Telephone) is submitted, it should be in the name of the Applicant and no older than two months from the filing of the form (12 months, in case of foreign national).
OBTAINING DIRECTOR INFORMATION NUMBER
The Director Information Number (DIN) is how the MCA identifies directors of the company. Anyone over the age of 18 can apply. Citizenship doesn’t matter. This can be done online on payment of Rs500.
Here is the process:
Download Form DIR-3 from the MCA website.
Indian and foreign nationals can apply, but there is one difference between the details required: the former would need to provide PAN, while the latter need to provide Passport number. A soft copy of a Passport-sized photograph is also required. Ensure you don’t make common errors while filling this form.
Identity proof: A soft (scanned) copy of the PAN card or, in case of foreign national, passport is required.
Residence proof: A soft (scanned) copy of (any one) Driver’s License/Passport/Voter Card/Ration Card/Utilities Bill/Bank Statement. The last two of these should be no more than two months old. In case of a foreign national, it should be no older than 12 months.
OBTAINING NAME APPROVAL
The RoC requires you to submit form names in Form INC-1. Each time you submit this form, you pay Rs1,000. If the names you’ve suggested are rejected the first time, you may resubmit once (within 15 days) at no cost. However, if they’re rejected once more, you would need to pay again.
Here’s what you need to submit:
Download the INC-1 form.
The form allows a minimum of one name and a maximum of six. The best practice is to submit the maximum number, in order of importance.
You also need to submit the Main Objects of your business and the Significance of each proposed name. Your application should have one line on each.
Approval can take 2 days at the earliest, but it is more likely to take 5 to 7 working days.
Once approved, the name will be reserved for 60 days. Therefore, the application for incorporation must be approved before its expiry.
MOA AND AOA
Once the name is approved, the MCA requires further definition of the proposed company. These will be provided through the Memorandum of Association (MoA) and Articles of Association (AoA), which can be drafted by a CS or lawyer.
FILING OF E-FORMS
Once the MoA and AoA are drafted, the Final Filing process can begin. This involves the submission of the following documents:
INC-7, which is the main application for incorporation. The following documents need to be attested by a full-time CS:
Memorandum of Association
Articles of Association
Declaration of Profession in INC-8
Copy of utility bill no older than two months
Copy of PAN card/Passport
Affidavit from the subscriber to the Memorandum in Form INC-9
Verification of signature of subscribers (Form INC-10, in case company has no share capital)
INC-22, which states the location of the registered office
Proof of registered office address (Conveyance or sale deed, in case property is owned, or rent receipt)
Residential or commercial real estate, so long as it is in India
No-objection Certificate from owner of the property
DIR-12, which contains information regarding the appointment of the directors and key personnel of the company
Letters of appointment of Directors, CEO, Managers
Declaration by first director in INC-9
Declaration by appointee director and managing director in Form DIR-2
PAYMENT OF ROC FEES
RoC fees and stamp duty need to be paid at this stage electronically. RoC fees change according to authorised capital fee and stamp duty varies by location.
VERIFICATION BY ROC & ISSUE OF CERTIFICATE OF INCORPORATION
The RoC will verify the documents. If any changes are needed, you will be notified of the required changes. If it’s all clear, you shall receive the certificate of incorporation within 7 to 8 days. On final approval, the Certificate of Incorporation is e-mailed to the directors.