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One Person Company

One Person Company

Overview

As per the Companies Act, 2013, a One Person Company (OPC) is a unique entity where an individual can form a company. It combines the concepts of limited liability and succession, allowing a person to own and operate a company in their name. Prior to the implementation of the Companies Act, 2013, only two people could form a company. The Companies Act, 2013, supports the formation of One Person Companies (OPCs) in India, governing their registration and functioning.

In comparison to a public company, a private company must have at least two directors and two members. However, in contrast, One Person Company registration does not require a group of people for incorporation. According to Section 262 of the Companies Act, 2013, the official registration of an OPC in India is legal. One Person Company registration in India requires a single director and a single member representing the entire firm. This type of corporation has very few compliance requirements compared to a private corporation.

Benefits of OPC

Legal Status

An OPC obtains a separate legal entity status, safeguarding the individual who founded it from personal liability for company losses.

Easy Fundraising

Being a private company, OPCs find it easier to raise funds through venture capitalists, angel investors, and banks compared to proprietorship firms.

Reduced Compliance

OPCs enjoy certain exemptions from compliance requirements under the Companies Act, 2013, simplifying administrative obligations.

Simple Incorporation

OPCs can be established with just one member and one nominee, with the member also serving as the director. No minimum paid-up capital requirement simplifies the incorporation process.

Efficient Management

With a single person managing the OPC, decision-making is swift, leading to efficient company management without conflicts or delays.

Perpetual Succession

OPCs maintain perpetual succession, ensuring the company’s continuity even with only one member.

Comparison Chart

Features

LLP

Definition

Unregistered type of business entity managed by one single person

A formal agreement between two or more parties to manage and operate a business

A Limited Liability Partnership is a hybrid combination having features similar to a partnership firm and liabilities similar to a company.

Registered type of entity with limited liability to the owners and shareholders

Ownership

Sole Ownership

- Min 2 Partners

- Max 50 Partners

- Min 2 Directors

- Min 2 Shareholders

- Max 15 Directors

- Max 200 Shareholders

For One Person Company

- 1 Director

- 1 Nominee Director

Registration Time

7-9 working days

7-9 working days

7-9 working days

7-9 working days

Promoter Liability

Unlimited Liability

Unlimited Liability

Documentation

- LLP Deed

- Incorporation Certificate

Governance

Under Partnership Act

Transferability

Non Transferable

Transferable if registered under ROF

Transferable

Transferable

Compliance Requirements

Income tax filing if turnover is more than Rs.2.5 lakhs

Check Lists

Director & Shareholders Documents

Proof of Registered Office Address

Passport size colour photo

Proof of Registered Office address should not be older than two months. The utility bill must have the full name and full address. Any one document from below is acceptable :


- Electricity Bill

- Telephone Bill

- GAS Bill

- Mobile Bill

PAN Card (Mandatory)

NOC from the Owner of Premises

AADHAR card (Mandatory)

Proof of Identity (any one of the Below):


- Passport

- Aadhar Card

- Driving License

- Voter ID

Proof of Address (Any one of the below):


Every promoter of the company (Director as well as a shareholder) must submit any one document which is not older than two months as their Residential Address proof :


- Bank Statement

- Electricity Bill

- GAS Bill

- Telephone Bill

- Mobile Bill

Frequently Asked Questions (FAQs)

A One Person Company is a single owner business akin to a Proprietorship Firm. However, unlike a proprietorship, the liability of the sole shareholder of an OPC is limited. The management is controlled by directors in an OPC. We have prepared a comprehensive and detailed comparison table for all forms of businesses, for your better understanding.

To register OPC in India, you are required to pay OPC Registration fees to the ROC. This depends on the company’s authorised capital. The overall cost of OPC company registration also includes the costs of DSC, DIN, and stamp duty on MOA and AOA.

An OPC can be inherited by the nominee of the shareholder after his death. Every successive shareholder of the OPC must choose a nominee immediately after he assumes the office. No individual can be appointed as a nominee, unless he gives his consent in INC-3 form. The consent of the nominee along with his notice of appointment must be submitted to the ROC in INC-4 form.

OPCs are eligible for the same tax benefits as other types of companies, such as deductions on business expenses and tax rates applicable to companies.

Yes, an OPC can engage in any lawful business activities, unless specifically restricted by the laws or regulations.

The registration process for an OPC typically takes around 10 to 15 working days, subject to the availability of all necessary documents and information.

Yes, an OPC can have multiple branches across India or even internationally, subject to compliance with relevant laws and regulations.

OPCs have to file annual financial statements and income tax returns with the Registrar of Companies (ROC) each year.

Yes, an OPC can raise funds through various means such as venture capital, or borrowing, subject to compliance with relevant laws.

Yes, OPC can have directors, but it must have a minimum of one director at all times. The sole shareholder is also the director by default.