One Person Company (OPC) is one of the popular business structures in India, which emerged as a very successful business, offering the benefits of a private limited company while allowing a single entrepreneur to own and manage it. However, many applicants face rejection during the OPC registration process due to various reasons. Understanding these reasons and implementing expert solutions is very important to get the help to ensure a successful registration of one person company. This article will deal with the key reasons for OPC registration rejection and will also provide expert strategies to get approved smoothly.
Understanding OPC Registration
Before delving into the reasons for rejection, it’s essential to understand the basics of OPC registration. The Ministry of Corporate Affairs (MCA) governs the registration process, which requires applicants to comply with the Companies Act 2013.
Key Features of OPC
- Single Ownership: Only one individual can own an OPC.
- Limited Liability: The owner’s liability is limited to the company’s assets.
- Perpetual Succession: The company continues to exist even after the owner’s demise.
- Separate Legal Entity: OPC is distinct from its owner in legal terms.
Eligibility Criteria
- Only an Indian citizen and resident (who has stayed in India for at least 182 days in the preceding financial year) can register an OPC.
- The owner must nominate a successor in case of unforeseen circumstances.
- An individual cannot incorporate more than one OPC.
- The paid-up capital should not exceed INR 50 lakh, and the annual turnover should not exceed INR 2 crore.
Key Reasons for OPC Registration Rejection
Several common mistakes can lead to OPC registration rejection. Here are some of the primary reasons:
1. Incorrect or Incomplete Documentation
One of the most common reasons for rejection is submitting incorrect or incomplete documents. The Registrar of Companies (ROC) requires specific documents for verification.
Common Documentation Errors
- Missing or incorrect PAN card details
- Incorrect address proof (Aadhaar, Voter ID, Passport, etc.)
- A mismatch between the documents and the application form
- Illegible scanned copies of documents
- Incomplete MOA (Memorandum of Association) and AOA (Articles of Association)
2. Non-availability of the Proposed Company Name
Company names play a vital role in registration. The proposed name should be unique and comply with MCA guidelines.
Name-Related Issues
- Name similarity with an existing company
- Usage of restricted words (e.g., “National,” “Bank,” “Government”)
- Non-compliance with naming guidelines as prescribed by the MCA
- Failure to provide proper justification for the selected name
3. Failure to Meet Eligibility Criteria
OPC registration is strictly governed by eligibility criteria. Applications can be rejected if:
- The applicant is not able to fulfil the residency requirement as provided by MCA.
- The nominee is not specified or does not meet the required criteria.
- The applicant is already associated with another OPC.
4. Improper DSC (Digital Signature Certificate) or DIN (Director Identification Number)
A valid DSC and DIN are essential for OPC registration.
Common DSC/DIN Errors
- Expired or invalid DSC
- A mismatch between DSC details and other documents
- Errors in the DIN application or incorrect DIN details
5. Non-compliance with Capital and Turnover Limits
- An OPC should not exceed the prescribed capital and turnover limits.
- If it does, it must be converted into a private or public company.
- Applications with incorrect financial declarations may face rejection.
6. Technical Errors in SPICe+ Form Submission
- Incorrectly filled SPICe+ (Simplified Proforma for Incorporating Company Electronically) form
- Submission of an outdated form version
- Errors in selecting the correct OPC structure
7. Registered Office Address Issues
- Address mismatch between ROC records and the provided proof
- Non-availability of valid rental agreement or utility bill
- Incorrect pin code, state, or jurisdiction details
8. Nominee-Related Issues
- Lack of nominee consent
- Nominee details mismatch in the application and documents
- A nominee is associated with another OPC
9. Inadequate Professional Certification
For certain documents, a Chartered Accountant (CA), Company Secretary (CS), or Cost Accountant must certify them. If missing, rejection is likely.
Expert Solutions to Get OPC Registration Approved
To avoid rejection and to ensure a smooth and hassle-free one person company registration process, follow these expert solutions:
1. Ensure Proper Documentation
- Check all documents properly and ensure that all required documents are there before submission.
- Provide clear, legible scanned copies.
- Verify that names and details match exactly across all documents.
2. Conduct a Name Availability Check
- Use the MCA portal to verify name availability.
- Avoid generic names that might be similar to existing companies.
- Follow naming guidelines and seek professional help if needed.
3. Verify Eligibility Criteria Before Applying
- Ensure that the applicant meets all the OPC eligibility conditions.
- Check nominee details and confirm eligibility.
- Avoid multiple OPC incorporations under the same individual.
4. Obtain a Valid DSC and DIN
- Ensure DSC is valid and registered with the MCA.
- Cross-check DIN details before submission.
- Avoid errors in the DIN application process.
5. Maintain Compliance with Capital and Turnover Limits
- If the capital or turnover exceeds the limits, prepare for conversion.
- Accurately declare financial details in the application.
6. Correctly Fill the SPICe+ Form
- Follow the latest version of the SPICe+ form.
- Carefully fill in all required fields without errors.
- Seek professional guidance if needed.
7. Ensure Proper Registered Office Documentation
- Provide a correct and verifiable registered office address.
- Attach supporting documents like a rental agreement or electricity bill.
- Double-check jurisdiction and address details.
8. Resolve Nominee-Related Issues
- Ensure nominee details are correctly filled and match supporting documents.
- Obtain and attach nominee consent in the required format.
9. Get Professional Assistance
- Hire a CS, CA, or legal expert to review the application before submission.
- Always seek necessary assistance and certifications from relevant professionals to understand the procedure.
- Seek guidance for compliance-related matters.
Additional Considerations for OPC Success
Regular Compliance and Reporting
- File annual returns and financial statements with MCA.
- Maintain proper bookkeeping and accounting records.
- Ensure timely GST and tax filings to avoid penalties.
Business Growth and Expansion
- Consider scaling operations while adhering to OPC restrictions.
- Plan ahead for conversion to a private or public company if growth exceeds limits.
Conclusion
One person company registration rejections can be complex and complicated which may hamper the course of business, but understanding the key reasons and implementing expert solutions in effective and efficient manner can significantly improve approval chances. Proper documentation, adherence to MCA guidelines, and professional assistance can streamline the process. Entrepreneurs should always take a proactive and well-planned approach to follow the prescribed procedure provided by MCA, check all details and documents properly, and ensure compliance to successfully register an OPC.
If you’ve faced rejection of your application, analyse the reasons, rectify errors, and reapply with confidence. With the well-structured strategy, your OPC registration will be approved smoothly and easily without any complications, that is why it is always advisable to consult with professionals to get the better understanding of the procedure, so that you can take wise decisions and avoid unnecessary complications.
