The idea behind introducing the One Person Company (OPC) in India was to create an environment for individuals who want to start their companies. OPCs provide liability and legal entity status like other corporate structures but with the advantage of allowing a single individual to be the sole shareholder and director.
Key Steps for Registering an OPC
To register an OPC in India, the following key steps need to be followed:
Obtaining Digital Signature Certificate (DSC)
The first step involves obtaining a Digital Signature Certificate (DSC) for the director. The DSC is mandatory for electronically signing and authenticating various forms and documents submitted during registration. The director must provide identity proofs such as an Aadhar card, PAN (Permanent Account Number) card, passport-size photo, and contact details to obtain the DSC.
Acquiring Director Identification Number (DIN)
To become a director of a One Person Company (OPC), you need to obtain a Director Identification Number (DIN) from the Ministry of Corporate Affairs (MCA). This requires submitting your proof of identity and address.
Choosing a Distinctive Company Name
The chosen name of an OPC must be one of a kind and separate from existing company names or trademarks. Once you have selected a name, it needs approval by the MCA.
Crafting a Memorandum of Association (MoA) and Articles of Association (AoA)
As a step in the registration process, you should submit the Memorandum of Association (MoA) and Articles of Association (AoA). These documents outline the objectives, rules and regulations of your company. These documents outline the objectives, rules and regulations governing your company.
Appointing a Nominee Director
Since an OPC has only one director, a nominee director must be appointed. The nominee director takes over the company’s affairs in the event of the sole director’s demise or incapacity.
Providing Registered Office Address Proof
The proposed OPC should provide valid address proof for its registered office during registration.
Detailed Process of OPC Registration
The detailed process of OPC registration involves filing various forms online through the MCA portal. The key forms include:
SPICe Form – Simplified Proforma for Incorporating a Company Electronically
The SPICe form is a comprehensive application that includes the director, nominee, and company details. It also serves as an application for DIN and DSC.
SPICe-MoA and SPICe-AoA
The MoA and AoA must be attached to the SPICe form for submission.
Digital Signatures and Document Attachments
The director should digitally sign the forms and documents using the obtained DSC. Additional attachments, such as address proofs, must be provided.
The ROC verifies the submitted documents and, upon satisfaction, issues the Certificate of Incorporation.
Understanding the Fee Structure
Various factors determine the fee structure for registering an OPC in India. The primary factor is the nominal share capital invested by the company.
Government Registration Charges
The government has set slabs for the registration fee based on the nominal share capital:
- For a nominal share capital up to Rs. 10 lakhs: A fixed fee of Rs. 2,000/-
- For every additional Rs. Ten thousand of the nominal share capital within Rs. 50 lakhs: An additional fee of Rs. 200/-
- Furthermore, the government has introduced fee waivers and incentives to encourage entrepreneurship, making the incorporation fee more accessible to new businesses.
Breakdown of Government Charges and Taxes
In addition to the registration fee, OPCs must bear stamp duties, which vary based on the state where the company is registered. These duties are levied on specific documents submitted during the registration process.
Additional Costs and Expenses
Apart from government charges, there are other costs to consider:
- Professional Fees: Seeking expert assistance, such as chartered accountants or legal advisors, incurs professional fees. The price may differ depending on how complicated the registration’s and what services are needed.
- Other Incidental Expenses: There could be expenses, such as notary fees or travel expenses.
Factors Affecting the Professional Fee
The professional fee charged by service providers may vary depending on several factors:
A. Complexity of the Registration Process: The registration process’s intricacy and the required support level affect the professional fee.
B. Additional Services Requested by the Applicant: Some OPCs may request additional services like GST registration or ongoing compliance support, which can influence the professional fee.
C. Expertise and Reputation of the Service Provider: The reputation and experience of the service provider may influence their fee structure.
Fee Comparison for OPC Registration
To better understand the fee range, let’s compare two scenarios:
A. Basic OPC Registration with Limited Services: A simple registration process without additional services.
B. Comprehensive OPC Registration with Ongoing Compliance Support: A full suite of services, including GST registration, accounting, and ongoing compliance assistance.
Tips for Cost-Effective OPC Registration
To optimize OPC registration costs, aspiring entrepreneurs can consider the following tips:
A. Conducting Research and Comparing Service Providers
Thoroughly research and compare different service providers to identify the most cost-effective option without compromising quality.
B. Negotiating Professional Fee and Inclusions
Negotiate with service providers to customize packages that suit specific needs and budgets.
C. Opting for Necessary Services while Avoiding Unnecessary Costs
Choose services essential for initial compliance while deferring others that can be addressed later as the business grows.
Timelines and Expected Duration for OPC Registration
Understanding the timeline for OPC registration is essential for planning and meeting business launch goals.
A. Standard Turnaround Time for Various Steps: Discuss the anticipated timeframes with service providers to avoid unnecessary delays.
B. Potential Delays and How to Mitigate Them: Be aware of potential bottlenecks and take necessary precautions to expedite the process.
Importance of Expert Guidance and Assistance
The benefits of seeking professional help during OPC registration cannot be understated.
A. Benefits of Seeking Professional Help: Professional expertise ensures compliance with regulations and minimizes errors.
B. Role of Chartered Accountants, Company Secretaries, and Legal Experts: Engaging qualified professionals helps navigate legal complexities and offers valuable insights.
Conclusion
Starting a One Person Company in India offers significant advantages to solo entrepreneurs. Understanding the fee structure and associated costs is crucial for budgeting and making informed decisions during the registration process. Following the steps outlined in this article and seeking expert assistance, aspiring entrepreneurs can confidently embark on their journey to establish their own OPC and fulfill their entrepreneurial dreams.
