India has seen significant growth in the area of startups and small businesses over the past decade. One Person Company (OPC) has become an increasingly popular business structure among solo entrepreneurs and startups. The concept of OPC was introduced under the Companies Act, 2013, to encourage individual proprietors to enter the formal corporate framework while enjoying various benefits of limited liability and a separate legal entity. This article will also discuss and provide a comprehensive breakdown of the OPC registration cost in India.
What is an OPC (One Person Company)?
One Person Company is a type of private company that can be formed with just one director and one member, and other than them, nothing is required. This structure combines the benefits of a sole proprietorship and a company, offering features like limited liability, perpetual succession, and better access to funding compared to traditional proprietorships.
Components of OPC Registration Cost
The total cost of OPC registration in India may include several elements of costing. While the government fees are standardized, professional fees may vary, which is based on the service provider, additional services included in the package, which provide the OPC registration benefits.
Here’s a breakdown of the typical components of OPC registration cost:
1. Digital Signature Certificate (DSC)
Digital Signature Certificate is required to be signed in electronic documents which is submitted to the Ministry of Corporate Affairs. The sole member and the nominee both need to obtain the DSCs.
Which may cost around ₹500 to ₹1,500 per DSC.
2. Director Identification Number (DIN)
DIN is a unique identification number for a director. It is allotted while filing the SPICe+ form (Simplified Proforma for Incorporating Company Electronically Plus).
- Cost: Included in the SPICe+ form filing
- Total: ₹0 (if applying through SPICe+)
3. Name Approval via RUN (Reserve Unique Name)
Before incorporation, the proposed name of the company must be approved by the MCA. The RUN service helps you reserve the company name.
It may cost around: ₹1,000 per application.
Note: In various cases, the name reservation is done directly within the SPICe+ form, so the separate RUN application may not be needed unless preferred as per the preference order.
4. Stamp Duty
Stamp duty may vary depending on the state in which the company is being registered. It is a levy on the Memorandum of Association (MOA) and Articles of Association (AOA).
It may cost around: ₹200 to ₹1,000.
5. Filing Fees for SPICe+ Form
The SPICe+ form is a comprehensive incorporation form that covers multiple registrations, such as PAN, TAN, EPFO, ESIC, GST (optional), and others.
- Filing fees: Depends on the authorized capital
- For the companies with authorized capital up to ₹10 lakhs: ₹0 (government fee is waived).
- The MOA & AOA Filing Fees: ₹0 (for capital up to ₹10 lakhs).
6. PAN and TAN Application
- Cost: ₹131 (for both PAN and TAN)
- This is included in the SPICe+ form
7. Professional Fees
Professional charges include fees paid to a Chartered Accountant, Company Secretary, or registration consultant for handling the documentation, filing, and advisory.
- Cost: ₹3,000 to ₹10,000 (varies depending on provider and services included)
This may include:
- DSC procurement.
- Name approval.
- Drafting of MOA and AOA.
- Filing of SPICe+ form.
- Follow up with MCA.
- Certificate of incorporation.
- Company PAN and TAN.
- Support for bank account opening.
Additional/Optional Costs to Consider
- Registered Office Address (Virtual Office): ₹1,000 – ₹5,000 per year
- GST Registration (if applicable): ₹500 – ₹2,000 (if done via a consultant)
- Trademark Registration: ₹4,500 – ₹9,000 (optional but recommended)
- OPC Annual Compliance and Filing Fees: ₹5,000 – ₹15,000 annually
Is OPC Registration Expensive?
While the registration cost might seem slightly higher than a sole proprietorship, the benefits of OPC structure often outweigh the cost. These include:
- Limited Liability: It protects the personal assets of the owner.
- Separate Legal Identity: OPC can own assets, sue or be sued.
- Credibility: Better perception among clients and investors.
Conclusion
One Person Company Registration is a smooth and cost-effective process when handled with proper guidance and a clear understanding of the regulations, procedures, and other requirements. While the government has simplified the compliance process through SPICe+ and waived off many charges for small companies, the cost of registration still includes professional services, documentation, and stamp duties. Entrepreneurs should budget between ₹7,000 and ₹15,000 for the entire process, depending on location, professional assistance, and optional services.
Choosing the right consultant can make the process smooth, save time, and ensure compliance with MCA requirements. With the right structure in place, an OPC sets the stage for business growth, offering the legal backing of a private limited company with the flexibility of a sole proprietorship. It is advisable to consult an expert to gain a proper understanding of the procedure, so you can make a wise decision and avoid unnecessary complications.