A One Person Company (OPC) is a great option for entrepreneurs looking to start a business with minimal compliance requirements and reasonable registration costs. With only one director and shareholder allowed, an OPC offers simplicity in management along with several advantages over sole proprietorships. This article explains everything you need to know about registering an OPC online in a cost-effective manner.

What is a One Person Company (OPC)?

Introduced under the 2013 Companies Act, a One Person Company is a separate legal business entity owned by a single promoter. The owner has limited liability which means their personal assets are protected from business debts and losses. At the same time, they have complete control over all decisions of the company. An OPC continues to exist perpetually with ownership transferring to successors through inheritance or nomination.

Benefits of an OPC

Some of the major benefits of an OPC include:

• The simple registration process is completely online.
• Only one director and shareholder is needed.
• Limited compliance under company law.
• The separate legal entity offers credibility.
• Limited liability protection for the owner.
• Easier to get business loans and credits.
• Smooth succession planning through nominees.

OPC vs Sole Proprietorship

Compared to a sole proprietorship, an OPC offers more advantages:

• Separate entity: An OPC has a distinct legal identity whereas a sole proprietorship has no legal existence apart from the proprietor.

• Limited liability: The owner’s liability is restricted to their shareholding in an OPC while it is unlimited in a sole proprietorship.

• Funding: An OPC finds it easier to raise funds through loans, financial institutions, angel investors etc.

• Succession: An OPC perpetually exists while a sole proprietorship ends with the owner’s death or incapacity.

• Compliances: Statutory compliance requirements are more in an OPC but still less than in a Private Limited company.

• Credibility: An OPC enjoys a higher market reputation and credibility than a sole proprietorship.

OPC Registration Process Online

Registering an OPC only requires a few key steps which can be fully completed online through the MCA company registration portal.

• Step 1: Obtain a Digital Signature Certificate (DSC)

As the application for One Person Company registration is filed online, the director needs a Class 2 or 3 digital signature issued by an authorized DSC issuing company.

• Step 2: Acquire Director Identification Number (DIN)

Before incorporating an OPC, the director must obtain a unique 8-digit Director Identification Number (DIN). This can also be applied online on the MCA portal.

• Step 3: Select a unique name

A distinctive name must be chosen for OPC registration following MCA’s name availability guidelines. The name approval application can be filed online on the MCA portal with fees of Rs. 1000.

• Step 4: Prepare incorporation documents

Key documents like the Memorandum of Association (MOA) and Articles of Association (AOA) containing internal rules for company operations must be drafted.

• Step 5: File the SPICE+ form for OPC

Finally, the SPICE+ form must be filled out online along with signed copies of MOA, AOA and other documents to apply for OPC registration.

• Step 6: Obtain the certificate of incorporation

On successful verification of details and documents by the Registrar of Companies (ROC), the OPC gets registered and issued a Certificate of Incorporation. This marks the completion of OPC registration.

Cost of Registering an OPC Online

Registering an OPC online involves very reasonable costs across various heads:

• Incorporation fees: Only Rs. 2000-5000 depending on authorized capital
• Stamp duty fees: Only Rs. 200-1000 depending on the state of registered office
• Digital signatures: INR 1000-1500 per signature
• Name approval fees: INR 1000
• Document drafting and professional fees: INR 5000-10000
• Nominee consent fees: INR 100

So in total, an OPC can be registered online for about INR 10,000 – 15,000 all-inclusive. When you take care of documentation and application filing yourself through an online consultant, costs remain very economical.

This is a major advantage over private limited companies which involve higher stamp duties, authorized capital requirements etc. Hence, OPC proves to be a budget-friendly entity to formalize your small business operations.

Conclusion

For small business owners, an OPC offers the best of both worlds – the credibility and formality of a registered company along with the affordability and ease of a proprietorship. As the entire registration process takes place online at reasonable costs, an OPC makes formalizing your enterprise extremely convenient. With well-defined succession planning and minimal compliance hassles, it also ensures smooth long-term business continuity. So if you wish to give your startup an independent corporate identity without burning through capital, registering an OPC online is definitely the way to go!