A One Person Company, commonly known as an OPC, is a private company having only one person as its member or shareholder.

It provides a single entrepreneur with the benefits of a separate legal entity, perpetual succession and limited liability while allowing complete ownership and control of the company.

Only a natural person who is an Indian citizen can incorporate an OPC. The person may be resident in India or residing outside India.

Accordingly, an eligible Non-Resident Indian may also incorporate an OPC. The applicable incorporation rules should be examined before proceeding, particularly where the proposed member or director resides outside India.

The sole member must appoint another eligible individual as a nominee and obtain the nominee’s prior written consent.

The nominee becomes the member of the company if the original member dies or becomes incapable of entering into a contract. The nominee’s consent and identity documents must be filed with the Registrar at the time of incorporation.

An OPC requires at least one director. The sole member may also act as the sole director of the company.

An OPC may appoint additional directors if required. However, every company must have at least one director who satisfies the prescribed stay-in-India requirement under the Companies Act.

There is no fixed statutory minimum paid-up capital requirement for incorporating an OPC.

The authorised and paid-up share capital may be decided according to the nature and funding requirements of the business. Government fees and stamp duty may depend on the authorised capital and the state in which the registered office is situated.

The documents generally required include:

• PAN and identity proof of the proposed member and director
• Address proof of the proposed member and director
• Recent photograph
• Digital Signature Certificate
• Proof of the proposed registered office
• Recent utility bill for the registered office
• Rent or lease agreement, where applicable
• No-objection certificate from the property owner
• Nominee’s consent in the prescribed form
• Identity and address proof of the nominee
• Details of the proposed business activities
• Proposed capital and shareholding details

Documents executed outside India may require notarisation, apostille or consular authentication.

The registration process generally involves:

1. Obtaining Digital Signature Certificates.
2. Selecting and applying for the proposed company name.
3. Finalising the business objects and capital structure.
4. Preparing the Memorandum and Articles of Association.
5. Obtaining the nominee’s consent.
6. Filing the incorporation application through SPICe+.
7. Applying for DIN, PAN and TAN through the integrated forms.
8. Submitting registered-office and identity documents.
9. Responding to any clarification raised by the Registrar.
10. Obtaining the Certificate of Incorporation.

The name of an OPC generally ends with “(OPC) Private Limited.”

An OPC has a legal identity separate from its member. The member’s liability is ordinarily limited to the unpaid amount, if any, on the shares held by the member.

However, personal liability may arise in cases involving:

• Personal guarantees
• Fraud or misrepresentation
• Wrongful conduct
• Unpaid share capital
• Personal statutory defaults
• Transactions undertaken in an individual capacity

Limited liability does not protect a person against liability arising from their own fraud, default or personal contractual commitments.

Yes. An OPC may be converted into a regular Private Limited Company or Public Limited Company.

For conversion into a Private Limited Company, the number of members and directors must be increased to at least two. The company must alter its Memorandum and Articles, pass the required resolution and file Form INC-6 with the Registrar.

The earlier compulsory-conversion thresholds based on paid-up capital or turnover were removed with effect from 1 April 2021.

An OPC may be required to:

• Open a company bank account
• Deposit the subscribed share capital
• File the commencement-of-business declaration, where applicable
• Appoint a statutory auditor
• Maintain proper books of account
• Prepare annual financial statements
• File annual financial statements and annual returns
• File the company’s income-tax return
• Maintain statutory registers and records
• Comply with GST, TDS, payroll and other applicable laws
• Report changes in the member, nominee, directors or registered office

An OPC generally has certain procedural relaxations. For example, where it has only one director, prescribed decisions may be recorded in the minutes book instead of holding a formal Board meeting. Where Board meetings are applicable, holding one meeting in each half of the calendar year with the prescribed gap is generally sufficient.

OPC registration does not automatically provide GST, MSME, Startup India or sector-specific registration. These registrations must be obtained separately wherever applicable.