What is Meant by One Person Company

The concept of One Person Company was introduced in India for the first time with the enactment of Companies Act, 2013. An OPC is a better version of a sole proprietorship as the former provides limited liability protection to the sole owner unlike the latter. This concept is relatively new in Indian corporate law, but several nations adopted it way before we did. Some examples are China, the UK, Singapore, the USA and Australia.

The main objective of OPC is to promote entrepreneurship among young entrepreneurs who want to establish a business on their own. The OPC has multiple advantages and the process of incorporating is also easy. Let’s find out what a One Person Company is, its features and more!

What is One Person Company?

The meaning of One Person Company in company law can be explained as a legal business structure that allows a single individual to act as both the sole shareholder and director. The OPC model allows the sole owner to have full control over the business operations with limited liability protection. 

Any individual who wants to become a solo entrepreneur must choose to register One Person Company in India. It has many benefits:

• Easy paperwork and quick registration process.
• Protection of personal assets from company debts because of limited liability.
• Complete control of the decisions of the company.
• Lower compliance and registration fee requirements.
• Tax deductions and simplified tax filing.
• Access to more investors as compared to sole proprietorship.

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Who can Become a Member of OPC?

An individual who wants to become a member of an OPC must fulfill the requirements to act as a member or a nominee:

• You must be a natural person.
• Indian citizen and resident of India.

Note: The person must stay in India for not less than one hundred and eighty-two days during the immediately preceding financial year.

Number of Members and Directors in OPC

The OPC can only have one member and the member will be presumed to be the first Director. Until the other director(s) are appointed lawfully as per Section 152(1) of the Act. 

The number of directors in OPC can be as low as one and as high as fifteen. To increase the limit of the number of directors, the OPC has to enact a specific resolution to the effect.

Features of One-Person Company

The key features of a One Person Company in India are as follows:

• Single Shareholder and Director: In an OPC, the single shareholder can also become the company’s director. As a result, the process of decision-making becomes easy.
• Limited Liability: In the OPC business, the members have the advantage of limited liability which means their personal assets are protected from company debts.
• Separate Legal Entity: The OPC company is a separate legal entity from its sole members. This status is essential for legal protection as well as business credibility.
• Perpetual Succession: The OPC company can continue even after death/incapacity of a single member because of the nominee system.
• Simpler Compliance: As compared to other types of companies, the compliances of OPC are much simpler for registration. As a result, the entrepreneurs save their time and resources.
• Minimum Authorized Share Capital: Most individuals can set up an OPC because the minimum authorized share capital requirement is just Rs. 1 lakh.
• Suitable for Startups and Solopreneurs: For new entrepreneurs and individuals, OPC is a simple and cost-effective way to enter the corporate world.
• Tax Benefit: OPC can avail tax benefits like lower tax rates and deductions on business expenses.

How to Incorporate an OPC?

To incorporate OPC, there are two ways. One way is through SPICe+ Part A (name reservation) and another way  is without filing a separate name reservation application. Below we have explained both the ways separately:

Incorporation Through SPICe+ (With Name Reservation)

The applicant can first apply for name availability through SPICe+ Part A. The applicant can propose up to two names for approval, subject to compliance with the Companies Act, 2013 and the Companies (Incorporation) Rules, 2014. After name approval, SPICe+ Part B must be filed for OPC incorporation within 20 days from date of name approval.

Incorporation Through SPICe+ (Without Prior Name Reservation)

The applicant can directly file SPICe+ form for incorporation without first reserving company name using Part A. Through a single integrated application using the form, the applicant can obtain the following: 

• Name Approval
• Company incorporation
• Allotment of Director Identification Number (DIN)
• Permanent Account Number (PAN)
• Tax Deduction and Collection Account Number (TAN)

It is important to note that in this route only one proposed company name can be applied for through SPICe+ form. 

How Does an OPC Differ from an LLP and a Pvt Ltd?

Have you ever wondered how an OPC differs from an LLP and a Pvt Ltd. This comparison table of different corporate structures is designed to help you evaluate their key parameters. Check out the difference between them in this table:

Conclusion

The OPC is a company that any single individual can establish and there is no need to have a heavy share capital. After the implementation of the OPC concept in India, many companies have been registered as One Person Companies with the Registrar of Companies (RoC), MCA. If you need assistance in setting up a One Person Company, you can reach out to business registration consultants at Registrationkraft.

Frequently Asked Questions (FAQs)

Q1. How many members can be there in an OPC?

An OPC can only have one member/shareholder at any given time. 

Q2. Can an OPC have two directors?

Yes. An OPC can have up to 15 directors.

Q3. Can an OPC have employees?

Of course, an OPC can have employees, with no cap on the number of employees it can hire.

Q4. Can a private limited company have a maximum of 200 members?

Yes, a pvt ltd company can have 200 members at most, at any given time.

Q5. Can two people own 100% of a company?

Yes, two people can jointly own 100% of a private limited company. However, it’s not possible in case of an OPC or public limited company.

Q6. Can I convert OPC to PVT Ltd?

Yes, it is possible to convert OPC to pvt ltd in accordance with the provisions of the Companies Act, 2013.

Q7. Can an OPC company buy property?

Yes, an OPC is a separate legal entity from its owner and can independently buy a property in its own name.

Q8. What is income tax rate for OPC?

An OPC is taxed as a domestic company. Under regular tax regime, the tax rate for OPC is generally 25%-30%. An OPC can opt for concessional tax regime u/s 115BAA and pay tax at 22%. The effective rate becomes 25.17% after surcharge and cess are applied.

Q9. Is there any turnover limit for OPC?

No. There’s no turnover limit for OPC as of 2026.