The Companies Act, of 2013 completely revolutionized corporate laws in India by creating several new concepts that did not exist previously. One such game-changer was the creation of the One Person Company concept. This led to the recognition of a really new way of starting businesses that accorded flexibility which a corporation reasonably entity offers, while also protecting economic obligation that sole proprietorship or partnerships lacked.

Several other countries had already recognized the flexibility of individuals to create a corporation before the enactment of the new Companies Act in 2013. These included the likes of China, Singapore, the UK, Australia, and also the USA.


Section 2(62) of the Company Act defines a “one-person company as an organization that has only 1 person as to its members.” So, an OPC is effectively an organization that has only one shareholder as its member.

Such companies are generally created when there’s only 1 founder/promoter for the business. Entrepreneurs whose businesses contain the primary stages value more highly to make OPCs instead of sole proprietorship businesses, because of the several advantages that OPCs offer.

Difference between OPCs and Sole Proprietorships

A sole proprietorship type of business may appear very slightly like one-person companies because they both involve one person owning the business, but there exist some differences between them. The foremost difference between the two is the nature of the liabilities they carry. Since an OPC could even be a separate legal entity distinguished from its promoter, and his assets and liabilities. The promoter isn’t personally at risk of repaying the debts of the corporation.

On the selection hand, sole proprietorships and their proprietors are identical persons. So, the law allows attachment and sale of the promoter’s assets (in case of non-fulfillment of the business’s liabilities.

Features of OPC  


OPCs can have only 1 member or shareholder, in contrast to different non-public companies.


a completely unique feature of OPCs that separates it from other kinds of companies is that the sole real member of the company possesses to say a nominee while registering the company.

No perpetual succession:

Since there’s only 1 member in an OPC, his death will end within the nominee choosing or rejecting to become its sole member. 

Minimum one director:

OPCs must have a minimum of 1 person (the member) as director. They’ll have a maximum of 15 directors. 

No minimum paid-up share capital:

minimum paid-up capital for OPCs – not prescribed any amount.

Special privileges:

OPCs enjoy several privileges and exemptions under the Companies Act that differing types of companies don’t possess.

Formation of OPCs

One person can form an OPC by subscribing his name to the memorandum of association and fulfilling other requirements prescribed by the Companies Act, 2013. Such a memorandum must state details of a nominee who shall become the company’s sole member, in case the primary member dies or becomes incapable of going into contractual relations.

This memorandum & the nominee’s consent to his nomination should be filed to the Registrar of Companies along with an application of registration. His nomination may later be cancelled by the member.

Procedure for OPC Registration

1. Complete OPC Form

2. Get DSC and DIN for Director of OPC

3. Verification and Name Approval of OPC

4. Apply for the COI of OPC

5. Your OPC is now ready

Benefits of OPC

• Less ROC Compliances Burden

• Organized format of Proprietorship

• Liability

• Separate Legal Entity

• Perpetual Existence

• Enjoys Social Recognition

Membership in one Person Companies

Only natural persons who are Indian citizens and residents are eligible to make a one-person company in India. The identical condition applies to nominees of OPCs. Further, such a natural person cannot be a member or nominee of over one OPC at any point in time. It’s vital to notice that only natural persons can become members of OPCs.

Further, the law forbids minors from being a member or nominees of OPCs. 

Cessation of OPC Status:

As per rule 6(1) of the businesses incorporation rule 2014, OPC shall cease to be entitled to continue as an OPC if:

1. Its paid-up capital exceeds ₹50 lacks, or

2. Its average annual turnover during the particular period i.e. immediately proceeding 3 consecutive financial years exceeds ₹2 crores. 

Conversion of OPCs into other Companies

Laws regulating the formation of OPCs expressly limit the conversion of OPCs into Sec 8 companies, i.e. companies that have charitable objectives. OPCs also cannot voluntarily convert into different varieties of companies until the expiry of two years from the date of their incorporation.

Privileges of OPCs

OPCs have the following privileges and exemptions under the Companies Act:

• They need to not hold annual general meetings.

• Their financial statements need not include income statements.

• A company secretary isn’t required to sign annual returns; directors can even do so.

• Provisions regarding independent directors don’t apply to them. 

• Several provisions regarding meetings and quorum don’t apply to them.

• They pay more remuneration to directors compared to other companies.