Guide to OPC Registration: Key Steps Explained

Starting a business as a One Person Company (OPC) is a great choice for solo entrepreneurs in India. OPC registration provides the benefits of a private limited company while allowing a single owner to have full control. Unlike a sole proprietorship, an OPC offers limited liability protection, perpetual succession, and better business credibility.

What is One Person Company (OPC) Registration?

Definition and Meaning

A One Person Company (OPC) is a legal business structure introduced under the Companies Act, 2013 that allows a single entrepreneur to incorporate a company with limited liability.

Key Features of an OPC

• Single Shareholder & Director (One person owns and manages the company).

• Limited Liability Protection (Owner’s personal assets are not at risk).

• Separate Legal Entity (OPC is distinct from its owner).

• Perpetual Succession (The company continues even after the owner exits).

• Less Compliance than Private Limited Companies.

Who Can Register for an OPC?

Only an Indian citizen and resident (staying in India for at least 182 days in the previous financial year) can register an OPC. Foreigners, NRIs, and minors are not eligible.

Advantages of OPC Registration

1. Limited Liability Protection

Unlike a sole proprietorship, where the owner is personally responsible for business debts, an OPC ensures that the owner’s personal assets remain protected.

2. Legal Recognition and Business Credibility

An OPC enjoys higher credibility than a sole proprietorship, making it easier to get loans, attract clients, and form business partnerships.

3. Perpetual Succession

Even if the owner exits or passes away, the business continues under the nominee director.

4. Lower Compliance Requirements

Compared to Private Limited Companies, OPCs have fewer regulatory obligations, making them easier to manage.

5. Tax Benefits and Reduced Compliance Burden

An OPC is taxed at the corporate rate but enjoys benefits like deductions on business expenses and lower tax rates compared to LLPs and proprietorships.

Step-by-Step OPC Registration Process

Step 1: Obtain a Digital Signature Certificate (DSC)

Since OPC registration is online, the owner needs a DSC to sign digital documents.

Step 2: Apply for Director Identification Number (DIN)

The Director Identification Number (DIN) is required for the sole director of the OPC. It can be applied for using SPICe+ Form.

Step 3: Name Approval through RUN Service

• Apply for Company Name Reservation through the Reserve Unique Name (RUN) service on the Ministry of Corporate Affairs (MCA) portal.

• The name should include “(OPC) Private Limited”.

• Example: ABC Technologies (OPC) Private Limited.

Step 4: Drafting the MOA and AOA

• Memorandum of Association (MOA): Defines the objectives and business activities of the OPC.

• Articles of Association (AOA): Defines the rules and regulations of the company.

Step 5: Filing SPICe+ Form for Company Incorporation

• Submit SPICe+ Form (INC-32) along with MOA, AOA, and other documents.

• Upload INC-3 (Nominee Consent Form) specifying the nominee director.

Step 6: Issuance of Certificate of Incorporation

Once approved, the Ministry of Corporate Affairs (MCA) issues a Certificate of Incorporation, making the OPC legally registered.

Step 7: Apply for PAN, TAN & Bank Account

• After Company Incorporation, apply for Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).

• Open a corporate bank account for business transactions.

Step 8: GST Registration (If Applicable)

• GST registration is mandatory if the annual turnover exceeds ₹20 lakhs (₹10 lakhs for special category states).

Compliance Requirements for an OPC

1. Annual Return Filing

• OPCs must file AOC-4 and MGT-7A annually with the MCA.

2. Income Tax Return Filing

• OPCs must file an Income Tax Return (ITR) before September 30th each year.

3. GST Filing (If Registered)

• File GSTR-1, GSTR-3B, and annual GST returns.

4. AD Code Registration (If Exporting Goods/Services)

• Businesses engaged in import-export must obtain AD Code Registration on ICEGATE to clear shipments through customs.

5. GST Cancellation (If needed)

• If the OPC is no longer operational, it can apply for GST Cancellation to avoid compliance burdens.

Can OPC Become a Subsidiary Company?

Yes, an OPC can be converted into a Private Limited Company if:

• Its turnover exceeds ₹2 crores.

• It wants to add more shareholders.

Once converted, the company can become a subsidiary company under a parent organization.

Conclusion

One Person Company Registration is an ideal business structure for solo entrepreneurs who want limited liability, credibility, and easier compliance than a sole proprietorship. The OPC registration process is simple and can be completed online through the MCA portal.

After setting up an OPC, business owners should comply with GST Registration, AD Code Registration, and annual filings to avoid penalties. If the business scales up, OPC can be converted into a Private Limited Company for greater investment opportunities.