How to apply GST Registration of OPC
The Government of India introduced Goods & Services Tax with the objective of digitalizing the indirect tax system and bringing all indirect taxes under one roof. The Government is continuously striving hard to achieve its objectives. After the introduction of GST in July 2017, a lot of improvements have been made by the Government making GST registration and return filing compliances simpler. The entire registration system has been made online leaving no scope for corruption and official hurdles. Even one-person companies can also register for GST easily.
Before we move to the main topic, you must know what is the meaning of One Person Company (OPC). In simple words, ‘One Person Company’ is a company which is owned by a single person. Do you know that earlier there was a requirement of minimum of 2 shareholders to form a company? Therefore, a single person has no option to form a company except a sole proprietorship. But now even a single person can form a company having a separate legal entity which is known as a “One Person Company”.
What is One Person Company?
One Person Company is a company which is formed by only one member. Such member acts as a shareholder as well as director of the company. The One Person Company is said to have a legal entity distinct from its shareholder. One Person Company can own assets and incur liabilities and the shareholder of the company shall not be liable to pay off debts of the One Person Company. According to Section 3(1)(C) of the Companies Act, 2013, OPC is treated as a ‘Private Limited Company’ however there are certain relaxations from compliances in the case of OPC.
Get One Person Company Registration Call Now at 9660930417
Who can form One Person Company?
Any Indian Citizen (Natural person) who is Resident in India can become a member of the One Person Company and form OPC. Earlier there was the restriction on a non-resident to form a One Person Company. But the Budget 2021-22 has made amendments and now Non-Resident Indians can also form One Person Company.
Who cannot form One Person Company?
A Minor person, Foreign Citizen and a person incapacitated to contract are restricted from forming a One Person Company. Minor cannot become a member or nominee of OPC and he cannot even hold a share with a beneficial interest in OPC.
Can a person become a member of more than one OPC?
A Member of one OPC cannot become a member of any other OPC simultaneously at a given point in time. However, there is no restriction on members of OPC to become shareholders of a private limited company.
Can OPC have more than one director?
OPC cannot have more than one member but there is no restriction on the OPC from having more than one director. A One Person Company can have a maximum of up to 15 directors.
What is the minimum capital requirement in One Person Company?
One Person Company can be registered even with “Nil” paid-up capital. However, the authorized share capital shall not be less than Rs. 1 Lakh.
Who can become a director in One Person Company?
Any natural person above the age of 18 years and who is holding DIN can become a director in the company. Even a foreign national can also become a director of One Person Company.
What happens if a single member of OPC dies?
On the death of the member, the nominee appointed by the member shall become a member of the OPC. The nominee shall take over the activities of the OPC and within 15 days intimate the ROC by Form INC-4 with applicable fees.
What are the benefits to incorporate OPC?
There are various benefits of incorporating an OPC which are as below:
- The liability of the member of OPC is limited unlike in the case of a sole proprietorship where the liability of the owner is unlimited.
- OPC has a requirement of only one shareholder and director
- Holding of Annual General Meeting (AGM) is not compulsory in the case of OPC.
- The OPC is required to conduct a minimum of two Board Meetings in a year (with a gap of at least 90 days in two meetings) only
- No Paid-up capital requirement, a minimum authorised capital of Rs. 1 Lakh is only needed.
What are the restrictions imposed upon the OPC?
Following restrictions are imposed by the Companies Act, 2013 upon the OPC:
- One Person Company cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporate.
- One Person Company cannot be incorporated or converted into a company under section 8 of the Act.
- No such company can convert voluntarily into any other kind of company unless 2 years have expired from the date of incorporation.
Now, we shall come to our main topic i.e. “GST registration for One Person Company”.
When OPC shall apply for GST registration?
The law relating to GST registration is also applicable to One Person Companies similar to any other business entity. In the following cases, One Person Company shall apply for compulsory GST registration:
- If the annual turnover of OPC from the supply of goods is more than Rs. 40 Lakhs (Rs. 20 Lakhs in certain states)
- If the annual turnover of OPC from the rendering of services is more than Rs. 20 Lakhs (Rs. 10 Lakhs in certain states)
- If the OPC is making an inter-state supply of goods or services
- OPC acting as a casual taxable person
- If the OPC is engaged in the supply of goods or services through e-commerce portals.
What are the documents needed for GST registration of an OPC?
Following documents are required in case of GST registration of One Person Company:
- Incorporation Certificate of One Person Company
- Copy of E-PAN of One Person Company
- MOA and AOA of OPC
- KYC of every director of OPC (Aadhar and PAN)
- Copy of cancelled cheque or bank statement
- Letter of Authorization (Board Resolution) in favour of a director to apply and sign in respect of GST registration
- Copy of Utility Bill such as Electricity Bill, Water Bill, Property Tax Receipt etc.
- Rent Agreement or NOC from the owner/ landlord (in case of rented premises)
- Email-id and mobile numbers of directors
Get GST Registration Now Connect at 9660930417
What is the procedure of GST registration for OPCs?
The process of GST registration is simple and online. You can apply for GST registration through the official portal of the GST department www.gst.gov.in. Having a GST registration carries many benefits including the benefit of GST input tax credit. The process of GST registration is as follows:
- Login to the GST Portal and click on ‘New Registration’ under Services>Registration
- Select State of the taxpayer, District and enter PAN of OPC along with email id and mobile number to generate Temporary Reference Number (TRN)
- On submission, the OTP verification page will be displayed. Enter Mobile OTP & Email OTP. On successful OTP validation, TRN will be generated
- Login to the GST portal again using TRN and submit the necessary information and documents in the GST registration application form displayed on the portal
- On successful submission, an acknowledgement will be received on the registered email address and mobile along with the Application Reference Number (ARN)
- GST officer will verify all the documents submitted by the company. If the documents are found to be in order, he shall accept the application and grant GST registration.
What is the timeline for OPC Registration?
The entire process of OPC registration with MCA takes nearly 15 days. The first step is the name approval which takes 3-4 days on average. DSC and DIN of the proposed director generally take 1 day. Documentation & check takes 2-3 days. After filing the application for registration of one person company, the processing of the application takes around 4-5 days before the incorporation certificate is granted. Applying for GST registration shall take 2-3 days additional after incorporation.
