A Comprehensive Way for Registering a Public Company

As mentioned, the limited public company donates its shares to common people. Although anyone can take the position of shareholder. Before obtaining the position of shareholder, the individual needs to register a public company in India. The major points of the registration process

• Selecting the company’s name: The primary step for public limited company registration is to choose a different and unique name that defines your public company. The name of the company should be based on its features and activities, not similar to those of other registered companies. The company’s name should adhere to the regulations under the Ministry of Corporate Affairs (MCA). The presentation of the company’s name can be checked through an online tool, MCA’s Name Availability.
• Legal process of a business: In India, the public company must comply with legal fundamentals outlined in the Companies Act, 2013. The preparation of necessary documents (MOA, AOA, and ROC) is the primary step and completing the application. Memorandum of Association (MOA) certificates explained the company’s activities and plans chart, including the powers they possess.  The Articles of Association (AOA) document outlines the rules and regulations of the company, such as how meetings will be held and what its purpose will be. 
• Scale for Directors: According to the administration rules, they must have at least or a minimum of 3 directors. Among the three, there must be one citizen of the Indian nation. For the company, the directors play an instrumental role, monitoring the legal compliance and other major functions. 
• Get DSC and DIN: The director who is selected for the company’s function needs to collect the Director Identification Number (DIN) and Digital Signature Certificates (DSC). This unique and different identification number clarifies that the directors get the permission to operate legally. 
• Certificate of Incorporation: After the complete procedure and the verification of the company’s name, legal connection of directors, and many more, the businesses needed to register with the Registrar of Companies. 

The application for the certificate of incorporation can be filed through the official portal, MCA. 

Necessary Documents for the Public Company Registration

• The personal details with government identity documents of shareholders and directors
• The registered company bill document
•  The requirement of NOC from the relevant operator 
• Requirements of MOA and AOA
• DIN and DSC of the directors 
• The other major documentation submitted to the Registrar of Companies

Final thoughts

Registering a public company in India adds multiple functions, which can be a little complicated. However, by learning the key stages, the procedure can be done.  While the public limited company registration adds the steps of selecting the company’s name, gathering the necessary documents as per the requirements, and many more. Connect with Legal Raasta Private Limited, which has years of experience and specializes in online public limited company registration in India. 

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With the large production, the Government of India introduced the guidelines to register a BIS certificate for footwear. The accuracy of quality and safety falls under these introductory guidelines. Let’s explore the importance of a BIS certificate for footwear manufacturers and the process to register with a regulatory body. 

Why footwear industry require a BIS certificate?

The Department for Promotion of Industry and Internal Trade (DPIIT) most recently introduced the regulations regarding the BIS certificate for footwear brand. The guidelines define a mandatory BIS regulation for footwear. All manufacturers who are active in footwear production, importation, or selling are required to have a valid BIS registration. The testing, inspection, and re-correction fall under the category of safety and quality standardization. 

It further enables the products to fit with Indian regulatory requirements regarding safety and quality purposes. Under the Department of Consumer Affairs, every footwear manufacturer must register with BIS for legal compliance and safety standards. But regulating the industry without a valid license is marked as illegal in India. Here is more information about the footwear certificate requirement:

Ensuring quality

The mandatory Bureau of Standards (BIS) certificate confirms that footwear products that are in the market meet all quality standards to label the ISI mark. Overall, registering with BIS is mandatory for all importers and manufacturers to obey quality regulations. The quality testing is meant to check which type of product is used and its durability. 

Market Entry

To get access to market entry in India, every footwear manufacturer is required to have a valid license. Having the BIS certification for footwear increases the well-growth of legally sold products in the Indian market and further creates transparency.

Customer’s safety 

According to quality control orders, the products that do not meet requirements have a high chance of causing injuries to customers. Before being used by customers, the regulatory body performs a safety check procedure. The process makes sure that the premium-quality footwear is long-lasting and durable for use. It further helps in building the potential trust of consumers. 

Legal compliance 

The footwear manufacturing industry adheres to the complex policies and guidelines that help in regulating business activities by preventing potential penalties (fines or imprisonment). 

International market access

The valid certificate of BIS for footwear enhances the chances of growth in the international market. It is the best way to create a visible place in another market for future growth. 

How to get a BIS certification for footwear in India

The Department for Promotion of Industry and Internal Trade (DPIIT) listed the 27 footwear products that come under the regulations of the BIS license. Well, before registering for the certificate, the manufacturers or importers need to acknowledge the IS (Indian Standards) for their products. Check out the points to register your footwear brand with the Bureau of Indian Standards:

• Reduce the wastage of time and manage cost-effectiveness by hiring a BIS consultant.
• Recognize the relevant IS for your specific footwear product nature. 
• Before selecting the IS for a footwear product, ensure that the product satisfies all requirements. 
• Visit the BIS official website to complete the application.
• Collect all necessary documents from the footwear industry and the person before application submission.
• Apply for a BIS certificate and pay the mandatory registration fee.
• The officials of the regulatory body verify the accuracy of the submitted form to check whether it fits with requirements.
• For the independent testing, the samples will be collected from the industry.
• The sample testing certificate is provided by BIS-recognized labs for further procedure. 
• Here, the registration work ends, as the applicant receives approval confirmation through any communication tool.

The BIS certification documents for footwear manufacturers

Submitting the correct and valid documents relevant to the Indian Standards requirements increases the chances of a rapid certificate approval. Sometimes, not providing the necessary and correct documents leads to certification cancellation. 

The Indian manufacturers who operate in the footwear industry are required to register with BIS online. Further, for the certificate approval, the manufacturers need to upload key documents that match with Bureau Standards. Check out the required documents for the BIS certificate for footwear manufacturers:

1. The footwear manufacturer needs to submit the registration documents of the industry and other crucial details.

2. They need to clarify their identity proof with the government PAN Card and Aadhaar Card. 

3. A detailed flowchart that outlines the production process, including the type of raw material and the machines used. 

4. Elaboration of valid equipment used for testing purposes. 

5. The record of production and which parameters were followed for product quality control.

6. Under the Indian Standards, present the reports of BIs recognized labs. 

27 footwear products that fall under the regulations of BIS

The Bureau of Indian Standards introduced quality control orders

The Government of India showcased its seriousness towards the footwear raw material. It has always been a mandatory discussion regarding which type of raw materials is used by the manufacturers for footwear production. In contrast, the Ministry of Commerce and Industry (MCI) issued the Footwear Quality Control Orders, 2020. In new quality control order regulations, manufacturers can only use leather and rubber raw materials for footwear production.

Also Read…BIS norms for Footwear Manufacturers

The major purpose was to introduce the new regulations to regulate the necessary label of the ISI mark and quality grade. As per the DPIIT, the raw materials, such as polymer, leather, and rubber, which are used for footwear production, were added for compulsory BIS certificate regulations. 

In addition, the authority permits the implementation of almost 24 products that are used for shoes, slippers, etc. The guidelines were made mandatory from July 1, 2023. Before, the three major quality control orders were introduced in June. 

User Query: How long it takes to BIS registration

The list of three Quality Control Orders (QCO) for standardization:

• Footwear designed from leather and other substances (quality control order), 2020
• Footwear designed from all rubber and all polymeric material and its substances (quality control order), 2020
• Personal Protective Equipment—Footwear (Quality Control) Order, 2020

What are the important principles to introduce QCOs?

The Indian administration and its public are committed to productivity.  Every single step depends on the other elements, which complete the life cycle. The civil administration is in place to create and ensure the market controls orders of products for the nation’s people. As per the requirements and new technologies, the purpose always changes; this forces the creation of new rules and regulations. A law for a certain product is generated when the requirements increase and make a difference in quality and safety. Furthermore, the Indian manufacturers are following the most recent laws introduced by the Bureau of Indian Standards.

 The purpose is to enable quality control orders to regulate the safety and quality for consumers. The type of products influences the market changes and consumers’ interest. The validation of QCOs brought a new development for customer protection and also decreased substandard imports, boosted exports, and many more. Since the Quality Control rules were introduced, a well-minimized importation has been seen for cheaper and third-class used times. 

User Query: Can i Import without a BIS Certificate?

Sum Up | BIS Certification for Your Footwear Brand

A BIS certificate is an essential tool that allows footwear manufacturers to work legally in the Indian market. BIS registration is the only way for importers, manufacturers, or retailers to bring growth in the footwear production sector. Without wasting time, register for the Bureau certification for footwear online or get consultation for a better understanding with the experts of Legal Raasta Pvt Ltd.

The experts in the industry are helping various footwear businesses to register with BIS for a new opportunity in domestic and international markets. 

The post The Process of Obtaining BIS Certification for Your Footwear Brand appeared first on LegalRaasta Knowledge portal.

Company Formation for One Person was mooted in the recommendations of Dr. JJ Irani’s Committee. The act legalized OPC which can be registered by just a single person, unlike private companies that require a minimum of 2 members and public companies that need at least 3 members. It mandated such companies to suffix the term ‘OPC’ with its name. One of the most important features of OPC is that the liability of its members is limited to the extent of shares value held by them.

This comprehensive blog outlines how One Person Companies (OPCs) offer a streamlined and legally distinct structure to form a company and what requirements it must fulfill to stay operational.

How OPC Registration is Transforming Small Businesses?

As per the Companies Act 2013, section 2(62), OPC refers to a company that has only one individual as its member. The act mandates the owner of OPC to appoint a nominee who cannot be a minor or hold beneficial interest. Both the nominee and member must be a natural person, a citizen of India, and must have resided in India for a minimum of 182 days in the previous calendar year. Such companies cannot undertake any financial investment activities and cannot convert into any other type of company unless 2 years have expired. Similarly, an OPC cannot be incorporated as a section 8 company under the Companies Act 2013.

OPCs are transforming the corporate landscape by allowing small businesses to not be bothered by too many compliances. It provides an outlet to those individuals who aspire to execute their entrepreneurial ideas and venture into the corporate world with ease and streamlined procedures. In addition, it provides the following benefits to small businesses:

• Single Ownership and Control: OPCs introduced by the Companies Act 2013 allow a single individual to incorporate and manage a business. This individual holds complete control over the business, empowering him/her to make all decisions related to the company’s operations, management, and strategies. Complete autonomy further allows for efficient and quicker decision-making in the business.
• Limited Liability: One-person companies provide a layer of protection to their members or shareholders. The liability of members remains limited to the unpaid amount on their shares as mentioned in the MOA (Memorandum of Association). It means that creditors cannot go after the personal assets of the owner to cover the company’s debts and liabilities. Limited liability allows small entrepreneurs to take the risk of doing business without any liability or legality getting attached to their personal assets.
• Separate Legal Entity: OPCs also have separate legal entity from its members and shareholders. It means a company and their member are two different entities for all purposes. This way, the company can manage its own assets where it can buy or sell properties and other assets under its own name. Similarly, OPCs can enter into contracts and engage in legal proceedings just like any other company. Further, it can sue or get sued in its name.
  
• Simplified Compliance: Such companies enjoy certain exemptions from some procedures and filings. For instance, OPCs are not required to hold annual general meeting and get their annual returns signed by a company secretary. Similarly, they are not mandated to file CFS (Cash Flow Statement) which is necessary for the majority of the companies. In addition, OPCs are exempt from auditor rotation if their turnover is less than INR 2 crores.
• Perpetual Succession: An OPC’s existence is not dependent upon the existence of its member(s) and thus it has a perpetual succession. Sole proprietors (which are also established by a single person) do not offer this feature and cease to exist at the demise or incapacity of the owner of the business. However, OPCs provide small businesses the right to continue existing despite the change in their ownership, membership, or management. The company continues to operate even after the demise or incapacity of the member and allows the nominee to take over.
• Nominee Requirement: In OPC registration, a nominee ensure business continuity and protect the interest of stakeholders. Nominee takes over a business when its sole member is unable to continue due to demise or incapacity. A nominee step in to take over the company’s affairs and fulfil obligations in the absence of the sole member. It also ensures smooth transition of management and control in instances of original member’s death or disability.

Also Read This – OPC V/s Foreign Company: Which Is Better For Entrepreneurs

OPC Growth in 2025 Key Trends include rise in AI and technology backed One Person Company where process is becoming automated, decision making is getting optimized with the help of data analytics and AI-powered tools.

Annual Return Filing by One Person Companies in India

Every OPC is required to prepare an annual return in the prescribed format, including the following particulars:

• Details of principal business activities, registered office, and information regarding holding, associate, and subsidiary companies.
• Details regarding indebtedness.
• Shared, debentures, shareholding patterns, and holding of other securities.
• Information regarding promoters, directors, KMPs (Key Managerial Personnel), along with changes made since the last financial year.
• Remuneration of KMPs and directors.
• Members and debenture-holder data.
• Meetings of the board of members along with details about various committees, including attendance details.
• Punishment or penalty imposed on the company, directors, officers, etc.
• Details in respect of shares held by investors, including their names, address, percentage of shareholding, etc.

Note: Annual returns is a document that includes the above mentioned details including company’s share capital, promoters, directors, registered office, etc.

What are the Exemptions Available to OPCs in India?

Company Formation for One Person is eligible for certain exemptions provided under the Companies Act 2013. These exemptions are as follows:

• Section 96: This section of the Companies Act 2013 exempt OPCs to hold AGMs (Annual General Meetings). Instead, OPCs are required to prepare minutes of the meeting which must be communicated to the member and recorded in the statutory minutes book.
• Section 98: The section empowers the tribunal to call, hold, and conduct meetings of the members which is not applicable to the OPCs.
• Section 100: Since OPCs typically have one director, the provision of this section which deals with the calling of EGMs (Extraordinary General Meetings) does not apply.
• Section 101: Deals with notice of meetings to be provided at least 21 days before the date of general meeting. This too is not applicable on OPCs.
• Section 103: This section deals with the minimum quorum requirement for company meetings.
• Section 111: OPCs are exempted from the requirement of this section that deals with the circulation of members’ resolutions.

By Incorporating Sustainable Practices in OPC Operations, such companies can avail the maximum benefit of exemptions which streamlined and reduce the burden of various compliances on them. OPCs can implement strategies to responsibly source their raw materials, minimize waste generation, and establish
reuse and recycling programs, among others.

What is the Registration Process of One Person Company?

• Obtain a Digital Signature Certificate (DSC) for the proposed director(s)
• Obtain DIN (Director Identification Number) for the proposed director(s)
• Select suitable name for the company and make application to the MCA (Ministry of Corporate Affairs) and check whether the proposed name is available or not.
• Draft MOA (Memorandum of Association) and AOA (Articles of Association)
• Sign and file required documents along with MOA and AOA with the ROC (Registrar of Companies) electronically.
• Pay the required fee to the MCA and stamp duty.
• ROC will then scrutinize the submitted application form and documents.
• Upon successful verification, ROC will grant the Certificate of Incorporation to the applicant.

Also Read This – How Technological Advancements Are Shaping OPC Management?

E-Filing Rules of Company Formation for One Person

The following are the important instructions for e-filing the OPC registration form:

• After obtaining name approval, an applicant is required to file e-Form INC 2 (e-filing) for incorporation of a One Person Company (OPC).
• It is mandatory to pay stamp duty electronically via MCA (Ministry of Corporate Affairs) portal in states which have authorized the central government to take stamp duty on their behalf.
• In case a company have share capital, it is necessary to provide break up details of authorized and subscribed share capital.
• Applicants are required to enter the address details of the police station under whose jurisdiction the company’s registered office is located.
• Users are required to file DIR 12 e-Form in case director and promoter of the company are not the same persons.
• In case the subscriber and director are the same person, it is necessary to attach a consent declaration.
• Every OPC is mandated to provide a name in the nominee clause. The individual must be a natural person and a resident of India.
• The name of the nominee should be mentioned in the MOA (Memorandum of Association).

Is It Necessary to Hire a Professional for OPC Registration? Although not mandatory, hiring professionals like a Chartered Accountant, Company Secretary, or Cost Accountant is highly recommended to ensure a smooth and speedy registration and compliance process.

Final Thoughts

Company Formation for One Person is considered ideal for traders and entrepreneurs who intend to operate on a small scale and take as minimal risk as possible. With the introduction of One Person Company (OPC), it has become easier for entrepreneurs to showcase their capabilities and provide the best services in the global arena. When compared to sole proprietors, OPCs are organized business units that are established within the legal supervision and regulation of the Companies Act 2013. The act strengthens the units by making them a separate legal entity, offering the feature of limited liability, and enabling owners to have complete autonomy over their operations.

OPCs are gradually turning into the most preferred form of business organization specially for start-ups and small businesses. OPC registration in India require minimal paperwork and compliances and hold bright future for aspiring entrepreneurs. Consult with Legal Raasta to better understand various aspects of One Person Company formation in India. Avail the benefits of OPC and get detailed insights into the nuances of regulatory provisions for company registration.

The post How OPC Registration Is Revolutionizing Small Business Ownership? appeared first on LegalRaasta Knowledge portal.

The concept of OPC Company Formation has been mooted by the MCA (Ministry of Corporate Affairs), allowing India to incorporate a single person company with ease and in alignment with the regulatory framework. Unlike sole proprietors (also established by one person), OPCs relish the benefit of perpetual succession through its nominee clause. In simpler terms, OPCs do not cease to exist in case of demise or disability of the original owner as the nominee director takes over the business to continue its operations.

This comprehensive blog sheds light on how technological advancement in OPCs has transformed the way these companies operate, along with deeper insights into OPC formation.

What are One Person Companies Under the Corporate Law?

The idea of One Person Company introduced in the Companies Act 2013 described OPC as a company registered with just a single member. Such a corporate establishment must have a minimum of one member and one director, where a single person is permitted to hold both of these positions.

One Person Companies have been in existence and operational for several decades throughout the globe. For instance, the United Kingdom was the first to pave the way for the seamless establishment of a one-man company. Singapore permitted the establishment of OPC through its amended Companies Act 2004. Similarly, China introduced the OPC framework back in 2005.

In India, OPC was recommended by the Dr. JJ Irani Committee that classified companies on the basis of size (small companies and other companies) and numbers (One Person Companies, Private Companies, and Public Companies). Further, an OPC can be a company limited by shares, limited by guarantee, and unlimited company.

The committee emphasized that ‘it is possible for an individual to operate in the economic domain and form a single person company through simpler regime and exemptions’.

How Technological Advancement Helps One Person Company?

Technology has transformed the way businesses operate and utilize their resources. OPC Company Formation is increasingly integrating technology to level up its strategies, operations, and competitiveness. It has allowed businesses to boost their productivity at minimal costs involved. Automation, machinery, and other technological tools and devices have affected OPCs in the following manner:

• Automate Repetitive Tasks: One person companies often operate on a smaller scale and limit their services to a particular region, employing a minimal workforce and using outdated technology. However, the integration of advanced tech-based tools and services has enabled such companies to streamline and expedite their repetitive tasks such as invoice processing, form filling, data entry, and email campaigns, among others.
• Improved Data Management: The sole owners and shareholders of OPC are now making use of big data and cloud-based tools to analyze market trends, customer behavior, and operational loopholes. Data analytics tools have improved decision-making in day-to-day operations, services, and products.
• Customer Relations Management: Technology has enabled one person companies to improve their relationship with various stakeholders including customers. Companies have been increasingly using high-tech tools to track customer interactions, analyze their preferences, and take note of the feedback necessary to enhance operational efficiency. This has assisted companies to provide tailored services and experiences.
• Enhanced Communication and Collaboration: Online applications, apps allowed one person companies to seamlessly collaborate with their partners, clients, and co-workers. Further, cloud storage has sped up and simplified the sharing of information among various key stakeholders and boosted business productivity.

Can OPC Registration Help Boost Business Credibility? Registering a business as One Person Company provides it with a legal business structure, makes it a distinct legal entity, and fosters trust and credibility among various stakeholders through timely public disclosures.

What are the Characteristics of One Person Company?

The desire of an individual to establish a business venture prompted the government to introduce the OPC framework through its company law. OPC combined the features of a company and sole proprietor, whereby the owner remained a separate legal entity like any registered corporation. One-person companies widely gained momentum and became a preferred choice among small entrepreneurs and start-up owners. Here’s a list of features that allows OPC to stand out and emerge as an optimal business type choice:

• An OPC is incorporated as a private limited company.
• The company must have a minimum of one member and one director.
• Before initiating OPC Company Formation, the entrepreneur is mandated to appoint a nominee who must be an Indian citizen, a natural person, and a resident of India. The term resident of India specifies that the nominee must have stayed in India for a minimum of 182 days in the previous calendar year.
• A person who has incorporated an OPC cannot establish another OPC. Similarly, a nominee cannot be appointed as a nominee in more than one such company.
• An OPC will have to mandatorily convert into a private limited company in case its paid-up capital is more than INR 50 Lakhs or its average annual turnover exceeds INR 2 crores in the previous three consecutive years.
• An OPC cannot be a Section 8 company (a non-profit organization with the primary objective of promoting charity, research, sports, education, social welfare, etc.).
• One Person Companies cannot carry out or undertake investment activities such as lending, investing in securities, etc.
• Such companies can convert into any other type of company upon completing a minimum of 2 years since its inception.
• A private limited company (except section 8 firms) can convert into OPC given that it has a paid-up share capital of INR 50 lakh or less and an annual turnover of INR 2 crore or less.

OPC Registration for Tech Startups, service-based businesses, or any corporate venture is considered ideal as such companies are required to comply with fewer compliances, protect the assets of the owner from company debts and liabilities, and continue to exist even when the sole owner passes away or become incapable to manage the business, among others.

Benefits and Privileges Available to One Person Company

OPCs have become a popular business organization, especially among small entrepreneurs. Such companies require minimal paperwork, form as a separate legal entity from its owners, and provide the flexibility to add more members as the company progresses and scales up its operations.

• Limited Liability: One Person Companies are deemed fit for enterprises whose owners desire for limited liability. It is type of legal structure that protects owners’ and investors’ personal assets and wealth in case the company fails. Thus, creditors can only use the assets of company to cover its losses and cannot make the owner liable to pay the debt through its personal property.
• Fewer Compliances: OPCs are not required to file a Cash Flow Statement in their annual submission of financial documents with the ROC. In addition, it is not required to file an audit report, hold mandatory AGM (Annual General Meeting), and get its annual returns signed by a company secretary.
• Separate Legal Identity: Such companies are a separate legal entity. It means that shareholders and company are two different entities. This allows OPCs to execute contracts, sue or get sued, and own property under its own name.
• Perpetual Succession: The demise of the sole member of OPC does not affect its business continuity, unlike sole proprietors whose existing member’s death or any other contingency causes the business to dissolve and end its operations.
• No Paid-up Capital Requirement: OPCs require minimal capital to commence operations. Similarly, they are not required to maintain a minimum paid-up capital to obtain a Certificate of Incorporation.
• Board Meetings: In case the OPC has just one director, it is not required to hold board meetings but instead mandated to maintain a minutes-book that must include all resolutions details, and be signed and dated by the sole member. Whereas, OPC with more than one director must hold one board meeting in each half of calendar year (1 meeting in 6 months). The gap between the two meetings should not be less than 90 days.

How OPC Registration Affects Import and Export Businesses? OPC registration allows the business head to be the sole decision maker, protect their personal assets from the company’s debts, and help in availing schemes that offer easy financing facilities in export/ import activities.

Conclusion

As per the Company Act section 2(62), an OPC is a company formed by just one person as its member. Such business formation enjoys the complete autonomy offered under sole proprietorships and limited liability and separate legal identity like that of a company. Further, OPCs are subject to fewer compliances in the form of no obligation to submit cash flow statements and no requirement for board meetings in case the company has just one director.

The Company Act 2013 has eased the process of setting up a single person company, eliminating the complexities of traditional corporations and partnerships. For OPC Company Formation, an entrepreneur is required to obtain a Digital Signature Certificate (DSC), a Director Identification Number (DIN), and draft crucial legal documents such as a Memorandum of Association (MOA) and Articles of Association (AOA) for successful registration. Connect with Legal Raasta to understand the complex regulatory landscape of OPC registration and the compliances the company must follow to avoid any fines and penalties.

The post How Technological Advancements Are Shaping OPC Management? appeared first on LegalRaasta Knowledge portal.

An OPC (One Person Company) is formed and owned by a single person under the Companies Act 2013. Members in a company, a term used interchangeably with shareholders, typically refers to those individuals whose names appear in the register of members. In the case of a One Person Company (OPC), both member and shareholder are the same person who has subscribed to the company’s Memorandum of Association (MOA).

This comprehensive blog outlines every essential aspect of OPC Registration Online, providing detailed information on how such companies enhance the credibility of business.

What is One Person Company as per the Companies Act?

According to Section 2 (62) of the Company Act 2013, a One Person Company (OPC) is a company that has only one individual as its member. The Memorandum of Association (MOA) of these companies must indicate the name of the person (nominee) who will become the company’s member in case of death or incapacity of the sole subscriber. The nominee is required to submit consent in written form with the ROC (Registrar of Companies) at the time of incorporation specifying that he/she does not object to becoming a nominee and fulfilling the mandated criteria.

The law mandate that every private limited company except OPC to have a minimum paid up share capital as prescribed from time to time. An OPC is exempted from submitting Cash Flow Statement in its financial statement filed at the end of financial year. Further, these companies are mandated to mention in brackets the term ‘OPC’ along with its name wherever it is engraved, printed, or affixed.

OPC Registration for Tech Startups and small enterprises streamlines business operations, provides limited liability, and prescribes fewer compliance requirements. In addition, OPC as a company form is beneficial in a myriad of other ways such as faster incorporation and ease of management.

How Does OPC Boost Credibility within a Business?

Despite having a single owner within a One Person Company (OPC), the company still functions as a distinct legal entity. It means that the company has its own legal identity and is separated from its owners. The company has its own rights and obligations where it can own property, enter into contracts, and get sued under its own name. This along with several other characteristics helps businesses established as One Person Company (OPC) to boost credibility and trust.

• Establish Formal Corporate Structure: A person willing to establish a company can either opt for a sole proprietor or OPC. While both can be set up with just a single person as a member, sole proprietor is not registered under the Companies Act. Whereas, OPCs are recognized as legal entities under the CA 2013 and demonstrate their compliance with all legal requirements before incorporation.
• Foster Trust: Being registered as an OPC instead of sole proprietor offers more professional and legitimate identity to its owner. This is because sole proprietors are unincorporated business which provide no legal distinction between the business and owner. With the help of a consultant OPC Registration Online can be done easily and recognize the business and enhance trust and confidence of clients in the business.
• Access Government Benefits: The government of India provides several benefits to OPCs in the form of subsidies, tax exemptions, and assistance through welfare schemes upon fulfillment of certain criteria. By becoming eligible for these benefits, OPCs demonstrate their credibility and operations that value transparency and growth.
• Considered Reliable and Trustworthy: OPCs are considered as more reliable and stable business form as they fall under the regulatory oversight. The CA 2013 mandate such companies to periodically file returns, financial statements, maintain statutory register, and file income tax returns. This demonstrate compliance of such companies with the stipulated legal requirements and bring transparency in their operations.

What are the Features of One Person Company?

Company types such as private limited companies require a minimum of two directors and public companies need three directors to set up the corporate venture. Whereas, a One Person Company (OPC) is created when the company has only one promoter/ founder to incorporate a business. OPCs are widely preferred by individuals who are planning to set up small businesses or start-ups owing to the numerous advantages they offer throughout the company’s registration and post-registration phase. An OPC is a popular choice for the following reasons:

• Single Person Ownership: The Company Act 2013 allows a single person to set up a company, offering them complete ownership and control over the business operations. It helps in quicker decision-making, eliminate possibilities of conflict that may arise due to multiple people involved in the business, and allow them to pocket all the profits as his/her return on the investment.
• Flexible Management: The incorporation process of an OPC is less complex when compared to other type of companies. Further, OPC permit the sole member to have complete autonomy over their business, eliminating the requirement of conducting meetings or consulting others.
• Limited Liability Protection: Limited liability protection permit OPCs to separate the personal assets of business owners (members or shareholders) from the financial debts and obligations of the company. It also allows these companies to incur debts, enter into contracts, sue or get sued, and form a corporate veil which protect private asset of owners in case the company fails.
• Simplified and Fewer Compliance: One Person Companies are exempted from complying with certain legal provisions such as submission of Cash Flow Statement, holding of Annual General Meeting (AGM), and requirement of Company Secretary to sign the books of accounts of the company.
• Nominee Requirement: Before initiating OPC Registration Online process, the sole member is required to appoint a nominee who must be an Indian citizen and a natural person. The nominee takes over the company’s affairs when the original member dies or become incapacitated. This ensures business continuity unlike in sole proprietor where death or incapacity of owner lead to shut down of the enterprise.
• Lesser Penalties: The Company Act 2013 prescribe lesser penalties for certain company payable in case of any violations or non-compliance. One of such company is the OPC that is subject to penalty not more than one-half of the sum imposed as financial punishment.

How Technological Advancements Are Shaping OPC Management? By leveraging technological tools and equipment such as cybersecurity, AI, data analytics, automation, and blockchain, OPCs have been able to streamline its operations, increased productivity and efficiency of the business, and allowed the sole owner to manage the enterprise effectively.

What are the Compliances for OPC Post-Registration?

Upon successful OPC Registration Online, the company has to comply with various legal requirements set out by the Company Act. These companies need to remain compliant with the stipulated statutory provisions to uphold their operational integrity and maintain prescribed standards. These compliances are as follows:

• Submission of Financial Statements: One Person Company is required to file a copy of their financial statement along with other financial documents prescribed by the ROC within 180 days from the end of the financial year.
• Meeting of Board of Directors: An OPC is exempted from conducting meeting of the Board of Directors as they only have a single director. However, OPC that has more than one directors (maximum allowed limit up to 15) has to conduct at least one such meeting in each half of a calendar year (6 months). In addition, the gap between the board meetings must not be less than 90 days.
• Appointment of Auditor: As per the Company Act 2013 Section 139, an OPC is mandated to appoint an auditor. The auditor must be a CA (Chartered Accountant) or a CA firm whose majority of the partners should be practicing in India and qualified as CAs. It must be appointed within 30 days of the company’s incorporation using the Form ADT-1.
• Commencement of Operations: Within 180 days of incorporation of OPC, the company is required to file declaration using Form INCA 20A. The form ensures that the company has started its business operations. Failure to comply with this norm will result in penalties that can extend up to Rs. 1 Lakhs.
• KYC Compliance for Directors: The Director(s) associated with the One Person Company (OPC) is/are required to complete their annual KYC (Know Your Customer) process with the Ministry of Corporate Affairs (MCA). For this, Form DIR 3 must be filed by 30th September of the next financial year. It will help MCA maintain an accurate database of directors and increase transparency in corporate governance.
• Disclosure of Interest: By using MBP -1, directors in an OPC is mandated to disclose their interest in other firms and companies, including shareholding at the first board meeting of every financial year.
• Maintenance of Statutory Register: OPCs are legally obligated to maintain records and statutory registers, including register of directors, register of members, minutes of board meetings, etc. These registers must be accurate and updated at particular intervals.
• GST Compliance: One Person Company (OPC) selling goods and services are required to obtain GST registration in case their annual turnover exceeds Rs. 40 lakhs (in case of goods) and Rs. 20 lakhs (for services). Timely filing of GST is essential to avoid any interest charges, fines, and penalties.
• Income Tax Filing: OPCs are mandated to file their ITR (Income tax Returns) annually by 31st July of each year (timeline set for individuals) and September 30th of the same year (for business). Moreover, if annual turnover of OPC exceeds Rs. 1 crore, it becomes mandatory to conduct a tax audit.

OPC V/s Foreign Company: Which Is Better for Entrepreneurs? Foreign companies are not considered an appropriate choice for sole entrepreneurs who wish to establish a business in India. One Person Company (OPC) is preferred as an ideal alternative, offering simplified compliance, separate legal identity, limited liability, and sound legal structure.

Final Thoughts

A single individual can form a One Person Company (OPC) by subscribing to the MOA and fulfilling other legal requirements as stipulated under the Companies Act 2013. The MOA (Memorandum of Association) must include details of a nominee who will replace the original member in case of his/her death or incapacity. Only an Indian citizen who must have stayed in India for a minimum of 182 days in the previous calendar year can obtain a Certificate of Incorporation of OPC.

To initiate OPC Registration Online, the entrepreneur first must obtain a DSC (Digital Signature Certificate) and a DIN (Director Identification Number). Moving forward, it has to reserve a unique company name. For this, the individual can use the RUN (Reserve Unique Name) service available on the Ministry of Corporate Affairs portal. Further, it is necessary to prepare two important documents namely MOA (Memorandum of Association) and AOA (Articles of Association). Finally, the SPICe+ form has to be filed with MCA along with other requested documents and fees. Contact Legal Raasta Private Limited to get your OPC registered by expert professionals cost-effectively and seamlessly.

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A foreign company, as per the Companies Act is an enterprise incorporated outside India but has its business operations within India. For instance, a firm incorporated in the United States which has a branch office or JV in New Delhi, Bangalore, or any other state will be considered as a foreign company in India.

OPCs are mainly incorporated by single individuals to fulfills their entrepreneurial aspirations and avail benefits of a company without any complexity of multiple shareholders and hefty compliances. Whereas, a foreign company aims to establish their business in India often with the intent to expand their global reach.

Let’s delve deeper and understand the major differences between OPC and Foreign companies along with detailed insights into OPC Incorporation and foreign company registration process.

One-Person Company and Its Key Characteristics

One Person Company is a corporation constituted by a single national person. OPCs combine the feature of sole proprietorship with a company offering the individual member complete autonomy over their business operations and limiting his/her liability up to the extent of their investment in the company.

For OPC Incorporation, the entrepreneur must be an Indian citizen. Similarly, the applicant must be a natural person and not an artificial entity such as a business or trust. Before obtaining the Certificate of Incorporation, OPCs must appoint a nominee to ensure continuity of business in case of the owner’s death or incapacity.

• Limited Liability: The personal wealth and assets of the owner of OPC remain safeguarded in case the company goes bankrupt or faces a financial crisis. Liability of OPC’s owner is limited to their investment and thus any debt or losses of the company will not be covered by the personal assets of the owner.
• Separate Legal Entity: In case of legal disputes or financial issues, creditors will sue the company and not the owner of OPC. It is nothing but the separate legal identity of the company to incur debts, sue or get sued, and own property under its own name.
• Perpetual Succession: Perpetual succession is the legal provision where a company continues to exist for years even if its members retire, die, go bankrupt, or exit the firm. Unlike sole proprietor, OPCs remain in continuation in case its sole member is unable to discharge his/her duties or pass away.
• No Minimum Paid-up Share Capital: A One Person Company need not comply or maintain a minimum paid-up share capital unlike public company that require Rs. 5 lakhs. However, in case paid up capital of OPC exceed Rs. 50 lakhs or its turnover surpass the Rs. 2 crore mark, it is mandated to convert into a Private Limited Company.

How OPC Registration is Revolutionizing Small Business Ownership? OPC as a business form has offered a single person to establish a company with separate legal identity, limited liability, tax benefits, and fewer compliance requirements.

What are the Limitations of One Person Company?

Several drawbacks within OPCs stem from their solitary ownership. Unlike other companies which are incorporated with a minimum of two or more two directors, OPCs are owned and managed by just a single person. It hinders the company’s ability to access funds, execute large-scale projects, expand to broader and larger markets, and scale up its operations. Such companies deal with the following limitations:

• Limited Growth Potential: One Person Companies often struggle with scalability issues as the single shareholder can channel capital only up to a certain extent, cannot raise equity, offer ESOPs, cannot engage in certain activities, and cannot form Joint Ventures (JV) with other companies.
• Restriction on Certain Activities: As per the Company Act 2013, an OPC cannot engage in Non-banking financial investment activities such as investing in securities of other companies, issuance of convertible debentures, etc. In addition, an OPC can never be incorporated as a Section 8 company established for charitable purposes.
• Cannot Raise Equity Funding: An OPC cannot issue or allot its shares to the general public or any other individual. Such companies can raise funds only by means of NCD (Non-Convertible Debentures) or through loans. Further, an OPC can be converted into a private limited or public company only after 2 years of incorporation.
• Not Eligible for FDI: The business model of OPC further restricts these corporations from raising funds through Foreign Direct Investment. Unlike private limited companies that can raise FDI up to 100% under the automatic route, OPCs are not permitted to receive FDI as no foreign company or individual can directly control or own such business ventures.
• Ownership Restriction: A One Person Company (OPC) cannot be incorporated by a foreign citizen, Non-resident Indian (NRI), or Overseas Citizen of India cardholder. Thus, only those individuals who are Indian citizens and a natural person can register OPC in India. In addition, the sole member is also required to fulfill certain obligations such as having a minimum stay of 182 days in the country in the immediately preceding calendar year.

Incorporating Sustainable Practices in OPC Operations and adopting modern technologies such as artificial intelligence, cloud, and data analytics, can assist One Person Companies (OPCs) to increase their operational efficiency and mitigate the effects of these limitations. With sustainable strategies and advanced technology, OPCs can compete with large organizations and operate on a level playing field.

A Foreign Company: Definitions and Functions

Under the Companies Act 2013 Section 2(42), a Foreign Company is a defined as company or body corporate established outside India. These companies are characterized by:

• Corporations that conduct business in India either through an agent or by itself.
• A foreign company undertakes business activities through an electronic medium or by being physically present.
• These companies can conduct any business activity in any manner within India.

Thus foreign company is a body corporate that is incorporated outside India, and carries out business in the nation itself, but is not mandated to have a place of business in India.

In case Indian individuals or entities hold a minimum of 50% of the paid-up share capital of a foreign company in equity, preference, or partly preference and partly equity, it is required to comply with the provisions of the Company Act and other rules as if they were incorporated in India.

How OPC is a Preferred Choice for Solo Entrepreneurs?

One Person Companies (OPCs) are considered as an ideal business structure for those individuals who are intending to be solo entrepreneurs. Such companies are best suited for people who plan to establish their venture with modest capital availability and has no plans to obtain FDI funding or expanding globally.

Any single entrepreneur, given that he/she is a natural person, a resident of India, and has stayed in India for a minimum of 182 days in the previous year, can apply for OPC registration. These individuals can run the business independently i.e., have complete autonomy over the business operations and decision-making.

In addition, to ease the management and minimize the regulatory burden on sole members of OPC, companies act exempts these companies from preparing cash flow statements, holding AGM (Annual General Meeting), and getting their annual reports signed by a company secretary.

What are the Documents Required for a Foreign Company?

Every foreign company is required to register with ROC (Registrar of Companies) within 30 days of establishing a place of business in India. It must deliver the following documents to ROC to obtain legal authorization to operate within the nation:

• A copy of statutes, charter, memorandum of association, articles of association, or any other instrument that defines the company’s constitution.
• In case the above-mentioned documents are not available in English, they must be translated and sent to ROC.
• Full address of the principal office or registered office of the company.
• A list of secretaries and directors of the company including information as may be prescribed.
• Full address of the company’s office in India which is deemed to be the principal office within the nation.
• Name and address of one or more individual residents in India who are authorized to accept notices or other documents on behalf of the company.
• Details specifying whether the company has opened or closed a place of business in India.
• Declaration specifying that none of the authorized personnel or directors of the company has ever been a convict or debarred from forming a company in India or abroad.

Types of Documents Required for OPC Registration

OPC Registration for Tech Startups or any Small and Medium Enterprises requires submission of the following documents along with the application form and prescribed fees.

• Promoters KYC Documents: To obtain a Certificate of Incorporation from ROC (Registrar of Companies) for OPC, the entrepreneur has to submit identity proof (Aadhar card, Voter ID Card, Driving License, or Passport), PAN Card, address proof (bank statement or utility bill), and a DSC (Digital Signature Certificate).
• No Objection Certificate: For OPC registration, the individual is required to obtain an NOC from the property owner if the registered/ official address is rented. It will state that the property owner has no objection to the company using the premises and verify that it has a legitimate registered office. The certificate must contain the owner’s name, signature, and address.
• Registered Office Address Proof: To verify the official address of the company, an applicant can submit utility bills (water, telephone, electricity, or mobile bills), lease or rent agreements, ownership documents, etc.
• Memorandum of Association (MOA): For OPC Incorporation, an individual has to draft an MOA which will outline the company’s objectives, the liability of members, shareholding pattern, and other crucial information about the company. Applicants can take the help of a legal professional or use the MOA template available on the MCA portal.
• Articles of Association (AOA): Akin to MOA, AOA is another crucial document necessary to incorporate OPC in India. It encompasses the company’s internal rules and regulations, provides information on the duties and powers of directors, and lays down procedures for transferring shares, among others.
• Directors Identification Number (DIN): Every director in the OPC is required to obtain a DIN by filing Form DIR 3 on the official website of MCA along with other requested documents such as identity proof, address proof, recent photograph, etc.
• Digital Signature Certificate (DSC): The proposed director of OPC has to obtain a DSC from a certified agency. DSC is used to electronically sign documents during the OPC registration process and for filing forms with the Ministry of Corporate Affairs (MCA).
• Forms and Declarations: Lastly, entrepreneurs willing to incorporate OPC have to fill out forms like INC 3 (obtain written consent of nominee), DIR 2 (Consent of proposed director confirming they are not disqualified), INC 32 (also known as SPICe, used to incorporate company electronically), and INC 9 (state that first director/ subscriber is not convicted under any law).

Final Thoughts

In India, OPC as a company type has emerged as a popular choice for start-ups and small businesses owing to the various privileges it offers in registration, compliance, and operations. OPC is owned and managed by a single person and requires the appointment of a nominee who will act on behalf of the original single member in case of his/her death or incapacity to enter into a contractual agreement.

A foreign company, on the other hand, is a body corporate established outside India but conducts business activities within India. Such companies are required to have a presence or operations in India either directly or through an agent (liaison office, brand office, etc.). For OPC Incorporation as well as registration of foreign companies, the applicant has to register with the ROC (Registrar of Companies) functioning under the MCA (Ministry of Corporate Affairs). Connect with the professionals of Legal Raasta to obtain your DSC, and DIN, draft your MOA and AOA, and register any type of company formation within India.

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