Send an Enquiry
The concept of a One Person Company (OPC) was introduced under the Companies Act, 2013 to promote entrepreneurship and simplify the process of starting a business in India. It allows a single individual to form and manage a company with limited liability and a separate legal identity.
Before OPCs were introduced, a single person could only start a sole proprietorship, which offered no distinction between the owner and the business. The OPC structure bridges this gap — combining the flexibility of sole ownership with the legal protection of a corporate entity.
In 2025, the Ministry of Corporate Affairs (MCA) continues to promote OPCs as a business-friendly option for startups, freelancers, consultants, and small entrepreneurs who wish to operate as a corporate entity without adding partners or investors.
Definition of One Person Company
Section 2(62) of the Companies Act, 2013:
This means that one individual can be both the director and shareholder of the company while enjoying the benefits of limited liability, corporate status, and perpetual succession.
| Feature | Details |
|---|---|
| Single Member | Only one person can be a shareholder in an OPC. However, an OPC can have up to 15 directors. |
| Limited Liability | The liability of the owner is limited to the amount invested in the business. Personal assets remain protected. |
| Separate Legal Entity | An OPC is a legal entity with its owner. It can possess property, enter into contracts or can be sued or sue. |
| Nominee Requirement | Every OPC must appoint a nominee who will take over in case of the owner’s death or incapacity. |
| No Minimum Capital Requirement | There is no minimum paid-up capital requirement to incorporate an OPC. |
| Easy Compliance | OPCs enjoy relaxed compliance norms compared to private limited companies, such as fewer board meetings and filings. |
| Conversion Flexibility | OPCs can voluntarily convert into a Private Limited Company or Public Limited Company after crossing certain financial thresholds or time limits. |
Limited Liability Protection : The member’s liability is restricted to the amount invested in the business, protecting personal assets from business risks.
Separate Legal Status : Unlike a sole proprietorship, an OPC is treated as a separate legal person, ensuring greater business credibility and continuity.
Ease of Management : Since there is only one person managing the company, decision-making is quick and efficient without conflicts.
Better Access to Funding : OPCs can raise funds through loans, angel investors, and venture capitalists — an advantage not available to sole proprietors.
Tax Benefits : OPCs are taxed at a flat corporate rate, and owners can claim various business deductions and exemptions under the Income Tax Act.
Perpetual Succession : Even in case of the owner’s death, the nominee automatically takes control, ensuring uninterrupted business operations.
Enhanced Brand Image : Having “Private Limited” in the name increases customer and vendor confidence.
Only one member can own the company, limiting expansion or investment.
Certain restrictions on business activities like Non-Banking Financial Investment (NBFC) operations.
Conversion into a private company becomes mandatory if turnover exceeds ₹2 crore or paid-up capital exceeds ₹50 lakh.
Higher compliance cost than a sole proprietorship.
To register an OPC in India, the following conditions must be fulfilled:
The member should be a natural person and an Indian citizen.
The person should be resident in India (i.e., stayed in India for at least 120 days during the previous financial year).
The same person cannot form more than one OPC or become a nominee in more than one OPC.
The OPC must have a unique business name approved by the MCA.
The company should possess registered office address in India.
Opening of a Current Bank Account
Appointment of Auditor (Form ADT-1) within 30 days
Filing of Annual Returns (Form MGT-7A)
Filing of Financial Statements (Form AOC-4)
Maintenance of Books of Accounts & Statutory Registers
Income Tax Filing & Audit (if applicable)
| Tax Type | Applicable Rate |
|---|---|
| Corporate Tax | 25% (for turnover up to ₹400 crore) |
| Surcharge | 7% (if income between ₹1 crore – ₹10 crore) |
| Health & Education Cess | 4% on income tax + surcharge |
| MAT (Minimum Alternate Tax) | 15% of book profit |
OPCs can also opt for presumptive taxation if they meet conditions under Section 44AD (for eligible businesses).
| Type of Conversion | When Permitted |
|---|---|
| Voluntary Conversion | After 2 years from incorporation |
| Mandatory Conversion | If paid-up capital exceeds ₹50 lakh or turnover exceeds ₹2 crore |
Conversion can be done by filing Form INC-6 with the MCA.
| Basis | OPC | Private Limited Company |
|---|---|---|
| Members | One | Minimum 2, Maximum 200 |
| Directors | Minimum 1 | Minimum 2 |
| Nominee | Mandatory | Not Required |
| Compliance | Lower | Higher |
| Suitable For | Solo entrepreneurs, freelancers | Startups, small to medium businesses |
| Funding | Limited | Easier to raise from investors |
Freelancers and consultants who want corporate recognition.
Startups with a single founder.
Entrepreneurs seeking limited liability and full control.
Businesses transitioning from sole proprietorships.
Any Indian citizen who is a resident of India (staying for at least 120 days in the previous year) can form an OPC.
Yes. While the OPC has only one member, it can appoint up to 15 directors.
Yes. Every OPC must get its financial statements audited annually by a Chartered Accountant.
Yes, either voluntarily after two years or mandatorily if the turnover exceeds ₹2 crore or paid-up capital exceeds ₹50 lakh.
No, only Indian residents can incorporate an OPC as per the current Companies Act.
No. There is no minimum paid-up capital requirement to start an OPC.
Filing of AOC-4 (financial statements), MGT-7A (annual return), and Income Tax Return are mandatory.
