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OPC full form is One Person Company. It is a relatively new form of company that didn’t exist before the enactment of Companies Act, 2013. Prior to this Act, a sole entrepreneur could not form a registered company. They either had to operate an unregistered business, known as a sole proprietorship, or bring in another person to form a private limited company.
If you’re planning to register an OPC in the near future, we recommend you to go through this blog post. Here, we shall discuss common reasons why the Ministry of Corporate Affairs (MCA) rejects OPC applications. These reasons include non-compliance with company name guidelines and errors in nominee details among others.
The top reasons why MCA rejects one person company applications are mentioned herein. By understanding all the reasons prior to filing an application, you will be able to avoid some of the most common application errors and improve the chances/likelihood of smooth and timely approval of application :-
An OPC application is often rejected by MCA due to non-compliance with prescribed company name guidelines. The proposed name may be disapproved if it is identical or too similar to an existing company, LLP, partnership firm or registered trademark, even if there are only minor spelling variations. Names that are overly generic or lack a distinctive element are also likely to be rejected.
Further, using words that suggest a different type of entity, such as “LLP,” “Society” or “Trust,” while applying for OPC registration can also result in rejection. While choosing the company name, do not use keywords like national, central, union, federal, etc. Such keywords are not permitted by the MCA. Therefore, any proposed company name containing those keywords will face rejection.
It is recommended to perform a thorough MCA company search and trademark search. If conducted properly, these searches will help you determine whether the company name is unique. Additionally, make sure the OPC’s name ends with “(OPC) Private Limited.” While filling out the SPICe+ Part A form for company name reservation, you must provide two distinct, unique options in order of preference.
A nominee must be appointed for incorporating an OPC under the Companies Act, 2013. This requirement ensures perpetual succession, which is a key feature of an OPC. Unlike a sole proprietorship that ceases to exist upon the death/incapacity of proprietorship, an OPC continues to exist as the nominee assumes control in such circumstances.
During the incorporation process of OPC, the sole member of this company is required to obtain the nominee’s written consent in Form INC-3 and submit it along with the incorporation documents. Any errors in nominee details, failure to submit consent or incomplete information may lead the MCA to reject the OPC application.
To avoid such mistakes, make sure that the nominee’s written consent is duly obtained, all particulars are accurate and complete and the same are correctly reflected in the form.
A major reason for rejection of OPC application is providing identity and address proofs that are invalid, expired or insufficient. These documents undergo careful scrutiny by MCA so as to verify the sole member as well as their registered office’s legitimacy. While filing the application, you must make sure you provide valid documents. For address proof, don’t attach utility bills that are too old; they must be recent. Additionally, an NOC from the landlord in case of rented premises is mandatory.
If you provide a passport for identity proof, it must not be expired. Additionally, all the signatures mentioned on the form must match those mentioned on the identity proofs. The address provided in the SPICe+ form must be consistent with the documentation submitted.
Every OPC must have a physical registered office. This office’s address must meet certain requirements. If the address provided in the application is not a proper or a functional place for official communication, the application may get rejected by the MCA. For example, if you provide an address that is missing information, is not properly described or can’t receive official notices from the ROC, your application may get denied.
In the application, stating the wrong jurisdiction/state can also lead to its rejection. To avoid committing such mistakes, make sure the registered office address you provide in the application is correct, fully mentioned and is able to receive all official communications.
Without possessing a DSC, you cannot file an application for registering a one person company. Having this digital key is a mandatory requirement for electronically verifying the OPC applicant's identity. It is also required for authorizing digital documents of OPC like SPICe+ form, Memorandum of Association and Articles of Association.
So, in case the DSC is not obtained, is incorrect or invalid, your application can get rejected by MCA. Make sure to have a valid DSC before you begin the OPC registration process. The more you delay in obtaining the DSC, the more time it’ll take to incorporate an OPC.
Now that you know about some of the most common reasons why the MCA rejects OPC applications filed by applicants, make sure to carefully review all details and ensure full compliance before finally submitting your application online via the official MCA portal. If you need assistance in the OPC registration process, you can contact our experienced consultants at Registrationwala. We’ll ensure you file the application with accurate as well as complete details and documentation.
Q1. Can I register an OPC with a name that is the same as another already registered company?
A. No, you cannot possibly register an OPC with a name that is the same as another already registered company’s name in India. If you decide on a name for your OPC that is the same as another company in MCA records, your OPC registration application will face rejection.
Q2. Which DSC is required to file an OPC incorporation application?
A. DSC 3 is required to file an OPC incorporation application with the MCA.
Q3. Is it necessary for an OPC to have a registered office address?
A. Yes, it is necessary for an OPC to have a registered office address. Without this address, an OPC cannot operate.
Q4. Why is SPICe+ Part A required in the OPC registration process?
A. In the OPC registration process, SPICe+ Part A is required to reserve the name of one person company.
Still have questions about your OPC application? Our consultants are just a call away to help you navigate the MCA portal.
Hi, I'm Sachin Chawla. I’m a commerce graduate from Agra University and a Chartered Accountant (2015) with DISA certification. I focus on helping businesses with formation, management, tax and FEMA matters, business licenses and regulatory compliance, IP advisory, risk management and auditing among others. Through my articles, I aim to share my expertise and provide practical guidance in these areas.
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