Establishing a business independently as an entrepreneur brings both excitement and difficulties on the path. A one-person company (OPC) framework under the Companies Act 2013 helps small businesses and individual operating entities. The framework of a one-person company enables sole owners to acquire private limited company benefits together with self-operational control. This piece details both the qualifications needed for one-person company formation in India as well as a guide to completing such formalities for Indian businesses.
Eligibility criteria for one-person company registration in India
A prospective candidate needs to learn about the requirements for one-person company registration in India before initiating the application process.
- Single promoter and director:A company adopting one-person status needs the presence of one Indian resident member who stays within the country for 182 days during the previous fiscal year.
- Nominee requirement:The company member needs to select one person as their nominee for company management in case of death or incapability.
- Minimum authorized capital:A company does not need to fulfill any specific minimum authorized capital requirement as its starting capital can be based on reasonable business demands.
- Business restrictions:A one-person company is limited from participating in non-banking financial investment activities and cannot operate as non-banking financial company (NBFC).
- Conversion limitations:The paid-up capital must not exceed INR 50 lakh nor can turnover surpass INR 2 crore during a financial year otherwise, this company must change its status to a private limited company or public limited company.
Process of one-person company registration in India
The eligibility prerequisites completed; the following methods should be utilized for one-person company registration in India:
Step 1: Obtain a Digital Signature Certificate (DSC)
A Digital Signature Certificate (DSC) must be obtained by the applicant as the first step.
The applicant must acquire a Digital Signature Certificate (DSC) which comes from a certified agency because this ensures secure online filing. The Digital Signature Certificate functions as the requirement to authorize digital signatures for multiple applications throughout the registration procedure.
Step 2: Apply for Director Identification Number (DIN)
A sole promoter needing a Director Identification Number (DIN) should make their application through the Ministry of Corporate Affairs (MCA) portal. The Director Identification Number serves as a fundamental requirement that all future business directors of India must possess.
Step 3: Name approval process
The MCA must approve a unique company name that has been selected. Business owners need to select a name that follows established naming rules and differs from current company names as well as trademarks.
Step 4: Prepare incorporation documents
The corporate setup requires that both the Memorandum of Association (MoA) and Articles of Association (AoA) need to be prepared. The company objectives, rules, and regulations find definition through these documents.
Step 5: Filing of incorporation forms
The incorporation application file containing essential documents needs submission to MCA through their SPICe+ (Simplified Proforma for Incorporating Company Electronically) online platform. Apart from application documents the nominee needs to provide consent alongside identity and address documentation for submission.
Step 6: Certificate of incorporation issuance
Once the MCA completes its documentation verification process, the Certificate of Incorporation becomes available for the official registration of the one-person company. The company is authorized to begin its business operations.
This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.