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Single Owner? Start Your One Person Company

Revolutionize Your Business Game with the One Person Company (OPC) Concept in just 48 Working Hours at just Rs. 6,499/-*

One Person Company
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What Is a One Person Company (OPC)?

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:

 

  • One Person Company refers to a company with just one person member.

 

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.

Key Features of One Person Company

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.

Advantages of One Person Company

  • 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.

Disadvantages of One Person Company

  • 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.

Eligibility Criteria for OPC Registration (2025)

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.

Registration Process of One Person Company (Step-by-Step)

  • Step 1: Obtain Digital Signature Certificate (DSC) : The proposed director must obtain a DSC to sign electronic documents filed on the MCA portal.
  • Step 2: Apply for Director Identification Number (DIN) : Apply for a DIN for the proposed director using the SPICe+ form.
  • Step 3: Name Approval (SPICe+ Part A) : Submit one or two proposed names to the MCA for approval. The name should end with “(OPC) Private Limited”.
  • Step 4: File Incorporation Forms (SPICe+ Part B) : Submit details like registered office, capital structure, and nominee information through SPICe+ Part B.
  • Step 5: Draft MOA & AOA : Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) electronically through SPICe+ e-MOA (INC-33) and e-AOA (INC-34).
  • Step 6: File AGILE-PRO-S Form : This form enables registration for GSTIN, EPFO, ESIC, and bank account along with incorporation.
  • Step 7: Certificate of Incorporation : After verification, the MCA issues a Certificate of Incorporation (COI) along with the Company Identification Number (CIN).

Post-Incorporation Compliances for OPC

Taxation for One Person Company (2025)

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).

Conversion of One Person Company

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.

Distinction between One Person Company and Privately limited Company

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

Who Should Choose OPC in 2025?

  • Freelancers and consultants who want corporate recognition.

  • Startups with a single founder.

  • Entrepreneurs seeking limited liability and full control.

  • Businesses transitioning from sole proprietorships.

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FAQs

FAQs

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.

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