One Person Company

OPC Guide

Key Features Pros & Cons Compliance Is it for you?

The Ultimate Guide to One Person Company (OPC)

Discover how the One Person Company, introduced by India's Companies Act, 2013, blends the simplicity of a sole proprietorship with the robust legal protection of a private company, empowering individual entrepreneurs.

Key Characteristics

An OPC is defined by a unique set of features that make it an attractive structure for solo entrepreneurs. This section outlines the core attributes of a One Person Company. Click on any feature to learn more.

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Single Member

An OPC is owned and managed by a single individual who acts as both the sole member and director, simplifying decision-making.

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Limited Liability

The owner's personal assets are protected. Liability is limited to the unpaid share capital of the company, securing personal wealth.

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Nominee Requirement

A nominee must be appointed during incorporation to ensure the company's perpetual succession in case of the sole member's death or incapacity.

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Separate Legal Entity

An OPC is a legal entity distinct from its owner, allowing it to own property, enter contracts, and sue or be sued in its own name.

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Perpetual Succession

The nominee ensures the company continues to exist even after the sole member is no longer able to manage it, providing business continuity.

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Simpler Compliances

OPCs benefit from several exemptions and a more relaxed compliance framework compared to private limited companies, reducing the administrative burden.

Advantages vs. Disadvantages

While the OPC structure offers significant benefits for solo entrepreneurs, it's important to weigh them against the potential limitations. This section provides a balanced, side-by-side comparison to help you make an informed decision.

Advantages 👍

Limited Liability

Offers protection to the sole owner's personal assets from business debts and lawsuits.

Enhanced Credibility

A registered company structure appears more professional to clients, vendors, and lenders than a proprietorship.

Continuous Existence

The nominee provision ensures the business continues to operate seamlessly, even after the owner's demise.

Easier Access to Funding

As a private company, an OPC can raise funds from venture capitalists, angel investors, and banks more easily.

Disadvantages 👎

Restricted Business Activities

OPCs are prohibited from engaging in non-banking financial investment activities or investing in other corporate securities.

No Non-Profit Conversion

An OPC cannot be incorporated as or converted into a Section 8 (non-profit) company.

Mandatory Conversion

If paid-up capital exceeds ₹50 Lakhs or average annual turnover surpasses ₹2 Crores, the OPC must convert to a private or public company.

Suitable for One Person Only

This structure is strictly for a single member. If you plan to add a co-founder, you must convert the company type.

Compliance Corner

OPCs benefit from a simplified compliance framework under the Companies Act, 2013. Understanding these relaxed requirements is key to maintaining good legal standing. Use the tabs below to explore the main compliance areas.

An OPC must hold at least two board meetings annually, one in each half of the financial year, with a minimum gap of 90 days between them. This visual timeline illustrates the requirement.

First Half of Financial Year (Apr - Sep)

At least one Board Meeting must be conducted during this period.

--- Minimum 90-day gap ---

Second Half of Financial Year (Oct - Mar)

At least one Board Meeting must be conducted during this period.

Annual Return (Form MGT-7A)

OPCs must file a simplified annual return with the Registrar of Companies to report key corporate information.

Financial Statements (Form AOC-4)

Audited financial statements must be filed with the ROC annually to ensure financial transparency.

No NBFC Activities

An OPC is strictly prohibited from carrying out non-banking financial investment activities.

Conversion to Section 8 Not Allowed

An OPC cannot be incorporated or converted into a company for charitable or non-profit purposes (Section 8 Company).

Is an OPC Right for You?

Answer a few quick questions to see if the One Person Company structure aligns with your business goals. This is a simple guide and not legal advice.

Are you the sole founder of your business? Do you want to protect your personal assets from business risks? Is your business NOT involved in financial investment activities (like an NBFC)?

This guide provides a general overview of One Person Companies in India.

For specific legal and financial advice, please consult a qualified professional.