One Person Company in India

One Person Company in India

One Person Company (OPC) is a new form of company allowed by The Companies Act 2013. In this type of company, a single person can form a company with a limited liability of it’s member. The liability may be limited by shares or by guarantee. Only a resident of India can form such a company and a foreigner is not allowed to do so. 

The introduction of such entity has been very useful for small businesses, proprietorships and entrepreneurs as now they can incorporate an OPC limiting their liability similar to a Private Limited Company.

The following are the salient characteristics of an OPC –

Minimum 1 member is required to start an OPC

Only an Indian resident can start a One Member Company and a foreigner is not permitted to start the same

The prescribed minimum paid-up capital of an OPC is Rs.1 Lakh

As OPC is an independent legal entity and it’s member enjoy limited liability be it limited by shares or guarantee

OPC is a form of Private Limited Company so the compliance requirements are similar to Private Limited Company unless certain provisions are otherwise excluded for compliance by the Act

The name of the company shall include the words ‘One Person Company’ within brackets below the name of the company.

It’s essential that the person forming the OPC nominates a person for the perpetual existence of the OPC. Such a person becomes the nominee member and has to give a written consent agreeing to becoming the nominee.

The maximum number of Directors in an OPC can be 15 and they are not required to retire by rotation.

In case the revenues of the OPC crosses Rs. 2 crores and paid-up capital of over Rs. 50 lakh, it needs to be converted into a private limited.


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