One Person Company

One Person Company (OPC): A Simplified Way to Start Your Business

Starting a business can seem complex, but with the introduction of the One Person Company (OPC) in the Companies Act, 2013, India has made it easier for solo entrepreneurs to establish and manage their businesses with limited liability and formal recognition.

What is a One Person Company (OPC)?

A One Person Company (OPC) is a type of private company that allows a single individual to own and operate a business entity. Unlike sole proprietorships, OPCs provide the benefits of limited liability, separate legal identity, and better compliance structures.

Key Features of an OPC

1. Single Owner
   An OPC can have only one shareholder who owns 100% of the company.
2. Separate Legal Entity
   The company is treated as a distinct legal entity, separate from its owner.
3. Limited Liability
   The owner’s liability is limited to the amount they invest in the company.
4. Nominee Requirement
   A nominee must be appointed during incorporation to take over the company in case of the owner's incapacity or death.
5. No Minimum Capital Requirement
   There is no mandated minimum paid-up share capital to start an OPC.
6. Simplified Compliance
   OPCs enjoy relaxed compliance requirements compared to other private limited companies, such as exemptions from holding annual general meetings (AGMs).

Benefits of a One Person Company

1. Limited Liability Protection
   Unlike sole proprietorships, your personal assets are not at risk in case of business losses.
2. Separate Legal Identity
   The OPC can enter into contracts, own assets, and incur liabilities independently of its owner.
3. Ease of Management
   Since it has only one director and shareholder, decision-making is straightforward and quick.
4. Tax Benefits
   OPCs may avail of various tax benefits available to private limited companies, reducing the overall tax burden compared to sole proprietorships.
5. Access to Funding
   OPCs can raise funds through loans or later convert to a private limited company to attract investors.

Who Can Start an OPC?

To register an OPC in India, the following criteria must be met:

• Eligibility: Only a natural person who is an Indian citizen and resident (residing in India for at least 120 days in the preceding financial year) can form an OPC.
• Restriction: A person cannot incorporate more than one OPC or be a nominee in more than one OPC.
• Nominee Requirement: The sole owner must nominate a person to act on their behalf in case of unforeseen circumstances.

Steps to Register a One Person Company

1. Digital Signature Certificate (DSC):
   Obtain a DSC for the sole shareholder/director to file the online application.
2. Director Identification Number (DIN):
   Apply for a DIN for the proposed director.
3. Name Reservation:
   Submit a name approval application using the RUN (Reserve Unique Name) service on the MCA portal.
4. Incorporation Filing:
   File SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) with the Ministry of Corporate Affairs. Include documents such as MOA, AOA, identity proof, and address proof.
5. Certificate of Incorporation:
   Once the application is approved, the Registrar issues a Certificate of Incorporation, officially registering the OPC.

Compliance Requirements for OPCs

Although OPCs have simplified compliance requirements, they must adhere to the following:

1. Annual Filing:
   File financial statements and annual returns with the Registrar of Companies (RoC).
2. Income Tax Filing:
   Submit income tax returns annually and comply with GST regulations if applicable.
3. Conversion Rules:
   An OPC must convert into a private or public limited company if its paid-up capital exceeds ₹50 lakh or if its annual turnover exceeds ₹2 crore for three consecutive years.

Why Choose a One Person Company?

A One Person Company is ideal for:

• Solo entrepreneurs looking for limited liability protection.
• Startups that plan to scale and eventually attract investors.
• Professionals, consultants, or freelancers seeking a legal business entity.

How We Can Help

Registering an OPC requires legal expertise and familiarity with compliance requirements. Our team of experts provides:

• End-to-end support for OPC incorporation.
• Assistance with name approvals, document preparation, and filing.
• Ongoing compliance and legal advisory services to ensure your business operates seamlessly.

Take the First Step Towards Your Dream Business

Ready to start your One Person Company? Let us simplify the process for you!

Register Your OPC Today

Contact us for a free consultation and take the first step toward securing your business future!