Types of OPC: A One Person Company (OPC) is a unique business structure that blends the simplicity of a sole proprietorship with the advantages of a private limited company. This type of company allows a single person to own and manage the business while enjoying limited liability, meaning the owner’s personal assets are protected from business debts. Unlike a sole proprietorship, an OPC is considered a separate legal entity. In this blog, we’ll discuss the types of OPC and their key features, as well as the benefits and requirements for starting one. Trustlink India provides the best services for registering and managing OPCs.

Features of an OPC

Before diving into the types of OPC, let’s understand some key features that define this business structure:

1. Single Ownership: As the name suggests, an OPC has only one member or shareholder who owns the entire business.
2. Private Company Registration: OPCs are registered as private companies under the Companies Act, 2013.
3. Limited Liability: Unlike a sole proprietorship, the owner’s liability is limited to the capital invested in the business. Personal assets are protected from business debts.
4. Director Limit: An OPC can have up to 15 directors, though there is only one shareholder.
5. Restricted Share Transfer: OPCs impose restrictions on transferring shares, ensuring control remains with the owner.
6. No Public Invitation: OPCs cannot invite the public to invest in their shares or securities.
7. Minimum Capital Requirement: An OPC needs a minimum paid-up capital of ₹1 lakh.
8. Separate Legal Identity: The company operates as a separate legal entity under a unique name.

Types of OPC You Can Incorporate

According to the Companies Act of 2013, there are five types of OPC you can form based on the structure and liability:

1. OPC Limited by Shares:
   • Liability is limited to the unpaid amount on the shares owned.
   • Suitable for businesses requiring flexibility in share management.
2. OPC Limited by Guarantee with Share Capital:
   • Combines share capital with members guaranteeing a specified amount during winding up.
   • Ideal for businesses that need both funding and additional guarantees.
3. OPC Limited by Guarantee without Share Capital:
   • No share capital is involved; members only provide a guarantee.
   • Commonly used for not-for-profit organizations.
4. Unlimited OPC with Share Capital:
   • Members’ liability is not limited but includes share capital for additional flexibility.
   • Suitable for high-risk ventures.
5. Unlimited OPC without Share Capital:
   • Liability is unlimited, and there is no share capital.
   • Rarely used but can be considered for specific needs.

Trustlink India is the best service provider for guiding you through the selection and incorporation of the right type of OPC for your business needs.

Eligibility Criteria for Starting an OPC

To register an OPC, both the shareholder and the nominee must meet the following eligibility criteria:

1. Natural Person: Only a real individual (not a corporation) can be a shareholder or nominee.
2. Indian Citizen: The individual must be a resident of India, having stayed in the country for at least 120 days in the preceding financial year.
3. One OPC Rule: A person can be a member or nominee in only one OPC at a time. If involved in more than one, the extra membership must be relinquished within 180 days.
4. Age Limit: Minors cannot be shareholders or nominees.

Is It Necessary to Appoint a Nominee for an OPC?

Yes, appointing a nominee is mandatory during OPC incorporation. The nominee will take over the business in specific scenarios, such as:

• The owner passes away.
• The owner becomes incapacitated or unable to manage the business.

The nominee must provide written consent, and their details should be included in the Memorandum of Association (MoA).

Documents Required for OPC Registration

Here is a checklist of documents needed to incorporate an OPC:

1. Declaration in Form INC-8.
2. Consent from the nominee in Form INC-3.
3. Declaration by the member and nominee in Form INC-9.
4. Director’s consent in DIR-2.
5. Self-attested copies of PAN, Aadhaar, or Passport.
6. Proof of registered office address (utility bill or property tax receipt).
7. Digital Signature Certificate (DSC) for all directors.
8. Director Identification Number (DIN).

Trustlink India simplifies the document collection and submission process, ensuring hassle-free OPC registration.

The Process of Registering an OPC

Follow these steps to set up your One Person Company:

1. Check Eligibility: Ensure the shareholder and nominee meet the criteria.
2. Collect Documents: Prepare all required documents.
3. Obtain DSC and DIN: Get a Digital Signature Certificate (DSC) and Director Identification Number (DIN) for all directors.
4. Reserve Company Name: Check for name availability and reserve a unique name for your OPC.
5. File Spice+ Form: Submit the incorporation application through the Ministry of Corporate Affairs (MCA) portal.
6. Apply for PAN and TAN: Request PAN and TAN for tax purposes.
7. Approval by RoC: The Registrar of Companies (RoC) reviews the application and issues a Certificate of Incorporation.

Once registered, you can open a current bank account for the OPC and start business operations.

Benefits of Starting an OPC

• Limited Liability: Protects the owner’s personal assets.
• Separate Legal Entity: Establishes a professional identity for the business.
• Ease of Management: Simple structure with fewer compliance requirements than other company types.
• Tax Benefits: Enjoys exemptions and deductions available to companies.
• Perpetual Succession: The company remains operational even if the owner is incapacitated or passes away.

Commonly Asked Questions During Registration

1. Can I convert an OPC into a private limited company?
   • Yes, an OPC can be converted into a private limited company after meeting specific turnover or capital thresholds.
2. What are the annual compliance requirements for an OPC?
   • OPCs must file annual returns, income tax returns, and financial statements with the RoC.
3. Can an NRI own an OPC?
   • No, only Indian citizens and residents are eligible to own an OPC.

FAQs

1. What are the types of OPC?
   • The five types of OPC are OPC Limited by Shares, OPC Limited by Guarantee with Share Capital, OPC Limited by Guarantee without Share Capital, Unlimited OPC with Share Capital, and Unlimited OPC without Share Capital.
2. Is a Digital Signature Certificate mandatory for OPC registration?
   • Yes, DSC is required for all directors during the registration process.
3. How much does it cost to register an OPC?
   • The cost varies depending on professional fees and government charges, but Trustlink India offers competitive pricing for its services.
4. Can an OPC have more than one director?
   • Yes, an OPC can have up to 15 directors, but only one shareholder.
5. Why choose Trustlink India for OPC registration?
   • Trustlink India provides end-to-end services, from document preparation to post-registration compliance, ensuring a smooth process.

Conclusion

Starting an OPC is an excellent option for individuals looking to establish a small business with limited liability. Understanding the types of OPC and their features helps you choose the right structure for your business. Trustlink India is your trusted partner in registering and managing OPCs, offering expert guidance every step of the way. Let us help you turn your business idea into reality!