• One Person Company (OPC) – It is a form of company with only one member.The process of starting up an OPC is same as that of a general private limited company. It is a hybrid structure that infuses the benefits of a sole proprietorship business with a company form of business. For more details on One Person Company, please click FAQs on One Person Company
• Private Limited Company- A separate legal entity with perpetual succession. A minimum of two persons are required for a company registration. Interestingly, no MINIMUM PAID UP CAPITAL is required to start a company.
• Click here to know more: 5 reasons private limited companies are back in fashion
• Public Limited Company- At least least three directors. A public limited company can start its operations only after obtaining a Certificate of Commencement from the Registrar in addition to Certificate of Incorporation.
• Company Limited by Guarantee – A major difference of this form of company with other forms is that it does not have a share capital or any shareholders. Incidentally, the company is governed by its members, and the extent of their liability is defined by the Memorandum of Association.
• Non-profit Organizations (Generally known as Sec.8 Companies) – In India, popularly called Non-Profit organizations, come in three flavors, namely Trusts, Societies, Section 8 companies.

A One Person Company (OPC) is a hybrid structure, wherein it combines most of the benefits of a sole proprietorship and a company form of business. It has only one person as a member who will act in the capacity of a director as well as a shareholder. Section 2(62) defines One Person Company as a company which has only one person as a member. For more details on One Person Company, please click FAQs on One Person Company.

One Person Company will be formed as a “Private Limited Company”. It can be formed as company limited by share capital or limited by guarantee or unlimited company. The words “One Person Company” will have to be mentioned in brackets below the name of such company, wherever its name is printed, engraved or affixed.

The process of starting an One Person Company is the same as that of a general private limited company. Hence, the minimum authorized capital of the One Person Company would be Rs. 1, 00,000. However, there is no minimum paid up capital requirement.

An One Person Company can be started with one director and shareholder only.

A nominee is a person who in the event of death or disability of the subscriber of the One Person Company shall assume his position. Memorandum of Association of an One Person Company will mandatorily prescribe the name of the person.

Yes. Anyone can be appointed as a nominee, provided he or she holds a correct PAN in his or her name.

One individual can form only one One Person Company.

No. Only an Indian citizen and resident can form an One Person Company.

For the purposes of this rule, the term “resident in India” means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one calendar year.

A person can become a nominee in not more than 1 One Person Company.

• Liability of the subscribers (the directors and shareholders) is limited to the amount of money they have paid for shares, thus Stakeholders are not typically liable for corporate debts and liabilities.
• Extra capital can be raised by selling shares either privately or in the market. Members can leave or join without any restriction.
• The death, bankruptcy or withdrawal of capital by one member does not affect the company’s ability to trade.
• The disposal of the whole or part of the business is easily arranged.
• Enjoys high credibility as the books of accounts and other documents are available for public vigilance.
• ESOPs sweat equity and other incentives can be issued, which help attract and attain best of talents.
• Overall transparency at various levels.
• Separate Legal Entity from its owners. A company can sue or be sued on its own name.
• Broader capital base than proprietorship firms. Usually attracts venture capitalists, angels and merchant bankers.

Click more to read on advantages of a company -Advantages of a Private Limited Company Over a Public Limited Company

The choice of the entity depends on the circumstances of the case.

• Private Limited Company has lesser legal compliances.
• It is relatively less cumbersome to incorporate, organize and operate a Private Limited Company as it has been exempted from many regulations and restrictions to which public limited company is subjected to.
• There is no requirement of raising finance through public issue in case of Private Limited Company.
• A Private Company can commence its business immediately after its incorporation, whereas a Public Limited Company cannot start its business until a Certificate of commencement of business is issued to it.
• If limited capital is available, scale of operation is relatively low and ownership is intended to be held by limited people, then Private limited company is the best choice.

Click to read more on types of entities -Business Entity Types in India

The authorized capital of a company is the maximum amount of share capital that the company is authorized by its constitutional documents to issue to shareholders. It can be altered from time to time. Click to read more on -Procedure of Increase in Authorized Capital.

There is NO requirement of a minimum paid-up capital! You can start with any amount as you are comfortable with.

An OPC is taxed at the corporate tax rate of 30%.

Paid-Up Capital is the amount that has been received by shareholders who have completely paid for their purchased shares. This would not include any shares that have been bid on, but not yet purchased.

It will depend upon the nature of business you intend to pursue. However, after registering over hundreds of companies, it is our practical advice to keep note of few of many factors before registering your company in any city:

• The local registrations that will be required to be obtained for the company after its registration.
• Nature of your business and the demographic advantage that the city is expected to provide.

Click to read more on selection of city for registered office – Confused about where to setup the registered office for your start-up?

Yes, an Indian company can be incorporated with one or more foreign nationals as Directors. However, in private company wherein there are 2 directors and both of them are foreign nationals, one of them has to be a resident in India for a period of at least 182 days in the calendar year(as per Companies Act 2013). Also, wherein both the directors are foreign nationals, then disclosure has to be made whether 100 % FDI is allowed in the desired sector or not. However, foreign nationals cannot form an OPC in India. Click to read more on foreign nationals incorporating company in India – Complete guide on starting a company in India by Foreign Nationals

As per Companies Act, 2013, you can. The new Act provides for the concept of One Person Company, wherein an individual can start a company on individual basis. Click more to read on one person company -One Person Company concept in India comes to Reality

Before fixing on any name, one should always avail the public search of existing company/LLP name along with trademark search. More unique the name more is the chances of their quick reservation.

DIN Number is a unique identification number allotted to the directors by the Government. For obtaining a DIN number, application is made to the Government in Form DIR-3 with requisite documents. The prescribed Government fees for obtaining one DIN are Rs.500. Click more to read on DIN -FAQs on Director’s Identification Number – DIN

No, DIN is a one-time formality.

The name, address, e-mail ID, phone number, residential status, all can be updated by making an application in Form DIR-6, along with requisite documents and declaration. There are no prescribed Government fees for the purpose.

Yes, the basic personal details, namely the name of the applicant, father’s name of the applicant and his/her Date of Birth are verified by the DIN authorities from the PAN database.