One Person Company (OPC)

One Person Company (OPC)

One Person Company is a brand-new idea brought in India after entering the impact of the new Companies Act, 2013. It is the most appropriate shape of commercial enterprise for small organizations wherein the turnover of the employer is below Rs.2 crore and the paid-up proportion capital of the employer is within 50 lakhs. 

How OPC is formed

As the name suggests One Person Company (OPC) is a company that is formed with a single person as its member. In the traditional years, a minimum of two members was involved in setting up a company. The Companies Act of 2013 brings forth corporate laws in India that enable an individual to start a company. The USA, UK, China, and Singapore have recognized the individual talents of the citizens even before the enactment of this Act. 

Since the OPC comes under the ownership of a single person, it is described to be a private company. The government of India promotes the marketers of the USA and therefore it has added new and useful schemes for his or her growth and advantage.

Difference between OPC and Sole Proprietorships

The OPC and the Sole Proprietorships might look to be the same as a single person owns a business but it has got significant differences in them. The member of the OPC has limited liability to his investment in the company whereas the sole proprietorship has unlimited liabilities. Since the OPC comes under the private sector they are taxed under the income tax act for the private companies but in the sole proprietorship, the income generated is considered to be the owner’s income hence it is taxed under an individual’s income.



One Person Company (OPC)


Advantages of One Person Company:

There are some features that OPCs can enjoy which the other companies do not possess. Some of them are listed here below:-

  • They don’t need to hold annual general meetings
  • The cash flow statements need not be included in the financial statements
  • The annual returns can be signed by the company secretary or the directors
  • Provisions related to meetings, quorum, and independent directors do not apply to them
  • The law has not prescribed any minimum capital amount to the OPCs
  • OPC allows the individual to take risks without risking his/her assets

Drawbacks of the One Person Company:

Though there are many advantages to One Person Company, on the other hand, it has also got some downsides. They are:-

  • A minor person cannot become the nominee or member of the company.
  • The member and the nominee should be a citizen of the country and a resident in that same country. 
  • The OPC holds good only for small businesses
  • The NRI’s can’t Incorporate a One Person Company

No Perpetual Succession

It is necessary for the sole member of the company to mention a nominee while registering. The death of the owner results in the nominee choosing or rejecting to become the sole member of that company. Sometimes the OPC can come to an end with the death of the sole member. This makes the OPC differ from the other private companies as they do not follow perpetual succession. Sole members at any time through giving note to the company, alternate the name of the individual nominated through him and nominate a new nominee, together with his earlier consent. One person can be the member or the nominee The OPCs can have a maximum of 15 directors in them. 

Converting into a private company:

A person can change the One Person Company (OPC) into a private company only after the completion of two years from the year of implementation. After the completion of the two years, the member can apply for turning the OPC into a private company abiding by the rules and regulations put forth by the Companies Act, 2013.


There’s no difference between the proprietor and the commercial enterprise. The most regularly occurring varieties of company prison entities for small commercial enterprises at a preliminary stage that is started, controlled, and accomplished through a single person is One Person (Private Limited) Company. The One Person Company (OPC) may seem to be an attractive one but it seems to slow down the progress of small entrepreneurs. 


Who can register for One Person Company?

As per the Ministry of Corporate Affairs (MCA), only citizens and residents of India can register for the One Person Company. If the turnover limit exceeds 2 crores the company must be turned into a private limited one within 6 months.

Is it mandatory to appoint a Nominee in the case of OPC?

Yes, the member of the OPC to nominate a person who should also be a citizen of India. The nominee can withdraw his/her consent anytime by giving prior notice to the member of the OPC.

What are the restrictions in carrying on the activity of OPC?

  • OPC cannot carry on NBFC associated activities.
  • OPC cannot acquire/spend money on securities in its name in different frame companies but the member can make investments in the stocks of different frame companies.
  • OPC cannot trouble or allot stocks to everyone besides its member

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