Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC. The term “resident in India” means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one financial year

Yes for formation of One person company (OPC) registration with registrar of companies is mandatory. To know the process click here
Name reservation: Form INC-1 shall be filed for name availability.
Incorporate OPC: After name approval, form INC-2 shall be filed for incorporation of the OPC within 60 days of filing form INC-1.
Form DIR-12 shall be filed along with (linked) form INC-2 except when promoter is the sole director of the OPC.
The company shall file form INC-22 within 30 days once form INC-2 is registered in case the address of correspondence and registered office address are not same.

In case of companies including one person company the area of operation i.e. business activities, its relation with outsiders, restriction on transfer of shares, directorship and internal mode of operation of company are governed and is written in documents which is called Memorandum of association and Article of association. The Memorandum and Article of association are the basic documents of the company which are mandatory and just like constitution of the company. To know more about Memorandum and association and article of association click here.

Minimum paid up capital of Rs100000/- (One Lac rupees) is required to be introduced in order to incorporation/form One person company. In the One person company paid capital of the company is restricted to the extent of authorized capital of the company and in order to enhance the paid up capital, one has to increase the authorized capital of the company.

In case the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover of immediately preceding three consecutive financial years exceeds two crore rupees, then the OPC has to mandatorily convert itself into private or public company.

The OPC shall inform RoC in form INC-5, if the threshold limits is exceeded and is required to be converted into private or public company.

Form INC-6 shall be filed by an OPC for conversion of an OPC into private or public company.
Yes, the private company will also file form INC-6 for converting itself into an OPC. The paid up share capital of private company should not be exceeding fifty lakh rupees and should not have average annual turnover more than two crore rupees at the time of such conversion into OPC. The company shall be having one member and shall appoint one nominee to act as member in case of death or incapacity of the member at the time of conversion into OPC.

A person can be member in only one OPC.

Where a natural person, being member in One Person Company becomes a member in another OPC by virtue of his being a nominee in that OPC, then such person shall meet the eligibility criteria of being a member in only one OPC within a period of one hundred and eighty days, i.e., he/she shall withdraw his membership from either of the OPCs within one hundred and eighty days. Form INC-4 shall be filed in case of withdrawal of consent by the nominee or in case of intimation of change in nominee by the member.

Yes, with the certificate of incorporation and Memorandum of association  bank account after complying with other RBI Norms can be opened, there is no need to apply any other registration with government department like VAT or Service Tax etc.. To know more about how to open bank account click here.

No, only applicable government registrations are mandatory like if sales/supply of services exceed specified limit of turnover then registration with Goods and Services Tax Department is mandatory. To know about registration with government departments click here.

1. CORPORATION FORM: You can add LTD. to your business name. In business, having company form has indirect advantage. People like to deal with company and you can achieve their confidence in your business. Other benefit is getting employees easily. People prefer to work with company rather than firm.
2. LIMITED LIABILITY:  As sole proprietor, you have unlimited liability for your business result. If you are doing loss, your personal assets can be claimed by your creditors. So there may be some mental worry. But in one Person Company, you can form One Person Company limited by shares, limited by guarantee or unlimited company. You can choose here limited by share form and your liability is limited to business assets. Any business loss cannot touch your personal saving.
3. RELAXATION FOR SOME SECTIONS OF COMPANIES ACT: To reduce burden of compliance of laws of companies act, there is relaxation available to OPC former. He is not required to follow section 96, 98, 100 to 111. He is also not required to hold annual or extra ordinary general meeting. Additionally, he is not required to preparing cash flow statement. He can also sign annual return himself as a director and no need to get signed it by company secretary. Read more about Companies Act 2013.
4. FULL MANAGEMENT CONTROL ON OPC: He can achieve full management control over company. He is not required to give share of management to anybody. He can appoint directors but cannot give control to them. This will bring fast decision making process. This fast action process brings fast profitable results if decisions are taken wisely and proper care.
5. CONVERSION OF ONE PERSON COMPANY TO PRIVATE LIMITED COMPANY: One Person Company shall be converted to private limited company when OPC reached paid up capital at 50 lakhs rupees or when average turnover of company (3 years) reaches 2 crores or more. So it is easy to form OPC once and after that coverts it to private limited company. Until your turnover increases significantly, you can enjoy benefits of OPC.
6. MINIMUM ONE DIRECTOR: While forming one person company, you may act as director and shareholder. Only one director is valid for OPC. However, you can appoint others as director and maximum number of directors can be 15.

1. HIGH TAX RATE: As a corporate form, you cannot avail tax slab advantage. In proprietary, you are required to pay as per your income at 10%, 20% or 30% tax rate. But in OPC, you are directly charge 30% income tax. High tax rate is big disadvantage of OPC. Read about different corporate taxes by following this link.
2. COMPLIANCE COST: Compliance cost of proprietary or partnership firm is very low compare to one person company.
3. OPC IS ADDED IN NAME: You are required to mention OPC in your company name in bracket. There is slight lower impression that the company is ran by only one person. Other side, if you start company with few shareholders, the management cannot be devoted and you can give impressions to client also.
4. ONE PERSON MANAGEMENT: Shareholder is one and all the decisions are done by him. If he is wise, it is good but sometimes cross check is required for business growth. Company’s success and growth is all dependent on one person’s decision taking ability.
5. HIGH FORMATION COST: There is no requirement to any formation charges for proprietary concern except registration for various laws like service tax, PF , VAT when required. But in OPC, there is high formation charge. You are also required to start the company with one lakh rupees.
6. OPC INCORPORATION IS ALLOWED: You can incorporate only one OPC (One Person Company). If you want to start other company as OPC, it is not allowed. In today’s fast economy, more than one business can diversify income and save you from huge losses. Only one stream of income or business is risky nowadays. Having this condition is obstacle for serial entrepreneurs.
7. NOT SUITABLE FOR HIGH TURNOVER: There is provision of automatic conversion of OPC in PVT ltd. if you estimate high turnover of your business or you have already high turnover, better option is establish PVT ltd than One Person Company. Establishing OPC and after sometimes conversion of OPC to Pvt. ltd company is not good idea.

No, cannot invite investors money in form of equity capital rather it has to be funded as secured or unsecured loans. All banks and financial institutions give more preference to advance loans and funding to private limited companies rather than One person company.

No unlike partnership firm, in case of limited liability partnership and companies including one person company name of an existing company cannot be taken by any other person. If anyone tries to take same name it will not be approved by the registrar of companies. So it provide protection of theft of name irrespective of whether trademark of name is taken or not. Further taking name of the company requires approval from the registrar of companies and should company with the guidelines issued from time to time. To know more about such guidelines click here.

To know the forms which are required to filed with registrar of companies, click here.

To know the due date of filing forms with registrar of companies, click here.