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One Person Company (OPC)

Perfect for solo entrepreneurs looking for limited liability.

One Person Company (OPC) Registration in India

A Complete Guide A One Person Company (OPC) is the perfect business structure for solo entrepreneurs who want the benefits of a private limited company while enjoying limited liability and full control over the business. It is a separate legal entity, ensuring that the owner's personal assets are protected from business liabilities.


What is a One Person Company (OPC)?

A One Person Company (OPC) is a hybrid business structure that combines the benefits of a sole proprietorship and a private limited company. Introduced under the Companies Act, 2013, an OPC allows a single individual to start and operate a company with corporate status, limited liability, and tax benefits.


One-Person Company (OPC) Registration Summary

Category

Details

Overview

OPC provides limited liability and a separate legal identity for solo entrepreneurs. A single person acts as both director and shareholder.

Clients Master Services

Expert assistance for OPC registration, including document preparation, filing, and compliance at affordable fees.

Legal Framework

Introduced under the Companies Act, 2013 (Section 2(62)) to promote entrepreneurship and MSME formalization.

Eligibility Criteria

- Only Indian citizens (natural persons) can register an OPC. - Must be a resident of India (182+ days in the past year). - Minimum authorized capital: Rs 1,00,000. - Nominee appointment is mandatory. - Cannot operate in banking, insurance, or investment sectors. - Must convert to a private limited company if:     Paid-up capital exceeds ₹50 lakhs OR Turnover exceeds ₹2 crores. - One OPC per person; minors cannot be members.

Key Benefits

- Limited liability protection. - Complete control over the business. - Simplified compliance compared to a private limited company.

Limitations

- Restricted business activities in financial sectors. - Mandatory conversion to a private limited company if capital/turnover limits exceed.

Conclusion: OPC is an ideal choice for solo entrepreneurs seeking legal credibility, business flexibility,

 

Advantages and Disadvantages of One-Person Company (OPC)

Advantages ✅

Disadvantages ❌

Legal Status: OPC has a separate legal entity, protecting the founder from personal liability.

Limited Growth: OPC can have only one member, restricting capital-raising options for business expansion.

Easy Fundraising: Easier to secure funding from venture capitalists, angel investors, and banks than sole proprietorships.

Restricted Activities: Cannot engage in non-banking financial investments or charitable activities.

Reduced Compliance: Enjoys exemptions from certain compliance requirements under the Companies Act, 2013.

Ownership & Management Overlap: No clear separation between ownership and management, which can lead to conflicts of interest.

Simple Incorporation: Requires only one member and one nominee; no minimum paid-up capital needed.

Mandatory Conversion: If turnover exceeds ₹2 crores or capital crosses ₹50 lakhs, must convert into a private limited company.

Efficient Management: Quick decision-making as one person controls the company, avoiding delays.

Limited Expansion: Not ideal for businesses requiring multiple shareholders or large investments.

Perpetual Succession: Ensures business continuity even if the sole member is unable to continue.

Higher Taxation: OPC is taxed under the corporate tax rate, which may be higher than individual tax rates.

Conclusion: OPCs offer limited liability, fundraising ease, reduced compliance, and business continuity, but are best suited for small businesses due to growth limitations and mandatory conversion rules.

 

Documents Required for One-Person Company (OPC) Registration


To successfully register a One-Person Company (OPC) in India, the following documents are required for both the owner (director/shareholder) and the nominee.


A. Personal Documents of the Owner & Nominee

Document Type

Details

PAN Card

Permanent Account Number (PAN) card of both the owner (director/shareholder) and the nominee is mandatory.

Aadhaar Card

Serves as a primary identity proof and helps in linking various legal and tax-related matters.

Address Proof

Any one of the following: Passport, Voter ID, or Driving License (should match the details in the PAN).

Residential Proof

Any one of the following: Recent Electricity Bill, Telephone Bill, or Bank Statement (should not be older than 2 months).

Passport-sized Photos

Latest passport-sized photographs of both the owner and the nominee.

B. Registered Office Address Proof

Document Type

Details

Office Address Proof

Any one of the following: Recent Utility Bill (Electricity, Water, or Gas Bill) or Property Tax Receipt of the business premises (not older than 2 months).

Rental Agreement (if rented)

If the office is rented, a notarized rental agreement between the company and the landlord.

No Objection Certificate (NOC)

A written NOC from the property owner allowing the use of the address for business purposes.

 

One Person Company (OPC) Registration Process in India

Step

Details

Step 1: Obtain a Digital Signature Certificate (DSC)

The director must obtain a DSC from a recognized certifying authority. This is required for digitally signing incorporation documents.

Step 2: Obtain Director Identification Number (DIN)

Apply for a DIN from the Ministry of Corporate Affairs (MCA) for the proposed director.

Step 3: Name Reservation

Reserve the company name through SPICe+ (Part A) on the MCA portal, ensuring uniqueness.

Step 4: Draft MOA and AOA

Prepare the Memorandum of Association (MOA) and Articles of Association (AOA), defining the company's objectives and internal rules.

Step 5: File Incorporation Forms

Submit the SPICe+ (Part B) form along with supporting documents like MOA, AOA, nominee details, office address proof, and declarations.

Step 6: Certificate of Incorporation

Upon approval, the Registrar of Companies (ROC) issues a Certificate of Incorporation, along with PAN & TAN for the company.

Why Choose Clients Master for OPC Registration?

Feature

Benefits

Expert Assistance

Experienced professionals guide you through the entire registration process.

Affordable Pricing

Transparent One Person Company registration fees without hidden charges.

Compliance Support

Ensures that your OPC meets all legal and regulatory requirements.

Quick Processing

Simplified process for hassle-free company incorporation.

Post-Incorporation Compliance for OPC

Requirement

Details

Appointment of Auditor

Within 30 days of incorporation, an auditor must be appointed.

Annual Returns Filing

OPC must file Form AOC-4 (Financial Statements) and MGT-7A (Annual Return).

Statutory Compliance

OPCs must comply with Income Tax, GST, and MCA filings regularly.

 

Compliance Requirements for an OPC

Annual Filing

OPCs must file Annual Returns (MGT-7A) & Financial Statements (AOC-4) with the MCA.

Income Tax Return 

File ITR-6 as per corporate tax slabs.

GST Registration & Filing 

If turnover exceeds ₹20 lakh (services) or ₹40 lakh (goods), register for GST and file monthly/quarterly returns.

Audit Requirement 

OPCs exceeding ₹2 crore turnover must undergo a statutory audit.


Taxation of OPC in India

🔹 Corporate Tax Rate – OPCs are taxed at 25% (turnover up to ₹400 crore) & 30% (above ₹400 crore).

🔹 GST Compliance – Mandatory if turnover crosses ₹40 lakh (goods) / ₹20 lakh (services).

🔹 TDS Deductions – Must comply with Tax Deducted at Source (TDS) rules.


OPC vs. Sole Proprietorship – Which One is Better?

Feature

One Person Company (OPC)

Sole Proprietorship

Legal Status

Separate Legal Entity

No separate legal entity

Liability

Limited

Unlimited

Compliance

Moderate

Low

Tax Rate

Flat 25%-30%

Individual slab rates

Ownership

Single owner & nominee

Single owner only

Fundraising

Easier (Can take loans)

Difficult

 

Verdict: If you want limited liability, tax benefits, and a professional corporate identity, OPC is better than a sole proprietorship.


Conclusion: Why Register an OPC?

A One Person Company (OPC) is an excellent business structure for startups, consultants, freelancers, and small entrepreneurs looking for limited liability, legal recognition, and tax benefits.



 

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