When should you go for One Person Company registration

Sole ownership

One Person Company or single person company registration is a suitable option if you wish to start a business independently and retain full ownership and control. It allows you to have a separate legal entity as the sole shareholder and director.

Limited liability protection

One Person Company provides limited liability protection, separating personal assets from business liabilities. This means your personal assets are not at risk in case of any financial obligations or legal issues the company faces.

Credibility and trust

Registering as A personal company adds credibility and trust to your business. It signifies a formalized structure and legal compliance, which can be advantageous when dealing with clients, partners, or investors.

Expansion plans

One personal company allows you to convert into a private limited company in the future, which provides flexibility for growth and raising funds. If you have plans for expansion or attracting external investments, One Person Company can be a stepping stone.

Ease of compliance

A One-Person Company has fewer compliance requirements than other business structures, such as private limited companies. This makes it relatively easier to manage and maintain legal and regulatory obligations.

Individual control and decision-making

If you prefer making all the decisions independently without the need for a board of directors or shareholders’ meetings, One Person Company gives you complete control over decision-making.

To register one person company Following Documents are require for One Person Company Registration

  • Identity Proof: PAN card, Aadhaar card, or passport of the proposed director/shareholder of the One Person Company.
  • Address Proof: Rental agreement, utility bills (electricity bill, water bill, etc.), property ownership documents, or any other valid address proof of the proposed director/shareholder.
  • Passport-sized Photographs: Recent passport-sized photographs of the proposed director/shareholder.
  • Director Identification Number (DIN): The proposed director of the One Person Company needs to have a DIN, which can be obtained by submitting Form DIR-3 along with proof of identity and address.
  • Digital Signature Certificate (DSC): The proposed director of the OPC needs to obtain a Class 2 DSC to file the registration forms electronically.
  • Memorandum of Association (MoA) and Articles of Association (AoA): These documents define the constitution, objectives, and rules and regulations of the OPC. They need to be prepared and signed by the proposed director/shareholder.
  • Registered Office Proof: To establish the registered office of the OPC, documents such as rental agreements, utility bills, property ownership documents, or a No Objection Certificate (NOC) from the property owner, along with address proof, are required.
  • Consent and Declaration: The proposed director/shareholder needs to provide a consent letter and declaration confirming their appointment as the director/shareholder of the OPC.

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FAQs

1. What is a one person company (OPC) agreement?

A one person company agreement is a legal document that governs the formation and operation of a one person company, which is a type of corporate entity where a single individual holds the entire shareholding and controls the business. The agreement outlines the rights, responsibilities, and obligations of the sole member and the company itself.

2. Why is a one person company agreement necessary?

A one-person company agreement is necessary to establish clear guidelines for the company’s operation. It helps define the rights and obligations of the sole member, including management control, profit distribution, decision-making, and liability. Additionally, having a written agreement can provide clarity, protect the interests of the sole member, and ensure compliance with applicable laws and regulations.

3. Do I need a professional service to draft a one person company agreement?

It is highly recommended that you seek professional assistance when drafting a one-person company agreement. Professional services have expertise in company law and can ensure that the agreement includes all necessary provisions, adheres to legal requirements, and protects the interests of the sole member. They can customize the agreement based on the business’s specific needs and provide guidance throughout the process.

4. Can amendments or changes be made to a one person company agreement?

Yes, amendments or changes can be made to a one-person company agreement. It is essential to consult with a professional service to ensure that any modifications are correctly executed, legally compliant, and accurately reflect the new terms. They can guide you through the process and help protect your rights and the agreement’s integrity.

5. Is a one person company agreement legally binding?

Yes, a properly drafted one person company agreement is legally binding. Once the sole member has reviewed, agreed to, and signed the document, it becomes a legally enforceable agreement. It is important to ensure that the agreement is in accordance with the applicable laws and regulations governing one person companies in your jurisdiction.