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One Person Company Registration- An Overview
Are you a solopreneur who wants to give wings to your entrepreneurial dreams? One person company registration is the best option for you. Enjoy the merits such as ease of incorporation, less compliance needs and sole ownership and control with stress-free OPC registration.
Section 2 (62) of the Companies Act, 2013 provides provision for the incorporation of one person company by solo entrepreneurs with just 1 director and 1 member. This structure allows the person to have full control of the company while enjoying the benefits of limited liability.
Worried about hurdles in the path of your one person company registration in India? Talk to our business consultants for quick and budget-friendly solutions.
What are the Tax Implications of Operating as an OPC?
When considering the transition from a sole proprietorship to a One Person Company (OPC) or registering a new company in India, it's crucial to understand the tax implications involved. Here's a comprehensive look at what to expect:
- Tax Rate and Provisions: OPCs, like other companies, are taxed at a flat rate of 30% under the Income Tax Act, 1961. This is a significant difference compared to the potentially lower tax liabilities faced by sole proprietorships.
- No Specific Tax Advantage: Unlike other business structures, OPCs do not benefit from any specific tax advantages. The tax obligations, including Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT), apply to OPCs in the same way they do to any other company structure.
- Higher Tax Liabilities: OPCs are subject to higher tax liabilities on profits than sole proprietorships. This is an important factor to consider when evaluating the potential financial impact of forming an OPC.
- Dividend Distribution Tax: OPCs attract dividend distribution tax, meaning profits distributed as dividends are subject to additional taxation.
By understanding these tax implications, entrepreneurs can make informed decisions about the best business structure for their needs.
Benefits of OPC Registration Online
Single entrepreneurs enjoy various benefits of the formation of one person company in the business landscape of India. Have a look over the below-listed benefits of OPC registration online in India:
Simple Incorporation Process
The process to incorporate an OPC is simple and hassle-free, requiring just one member and one nominee, who can also be eligible to become the director. This dual role reduces complexity and streamlines management.
However, the OPC needs Rs. 1 Lakh as the minimum authorised capital, but at the same time, it does not need a minimum paid-up capital. This flexibility in capital requirements further simplifies the financial setup.
Moreover, compared to other forms of companies, an OPC offers an easier incorporation process, making it an attractive option for entrepreneurs looking for a straightforward company structure.
Access to Easy Fund Raising
OPC, which is a legal and fully functional private company, have full access to raise funds for its operations from alternatives like venture capitals, angel investors, incubators, etc. It is one of the significant benefits of OPC registration. Unlike a sole proprietorship, banks and financial institutions are more inclined to grant loans to an OPC. This preference stems from the structured nature of a company, which often presents lower risk compared to a proprietorship firm. Furthermore, the credibility of being a registered company enhances trust with potential investors, making it easier to secure funding. Therefore, whether through venture capitalists or traditional financial institutions, OPCs enjoy a smoother path to obtaining the necessary capital for growth and innovation.
Fewer Compliances
According to The Companies Act, 2013, OPCs have fewer compliances to meet during their incorporation. They are also exempt from making cash flow statements, getting the books of accounts and annual returns signed by the company secretary.
Easy Management Process
The registered OPC holds the sole authority towards managing the operations and making decisions for the efficient company management without conflicts or delays. Therefore, it is easy to pass the ordinary and special resolutions by simply entering them into the minute book.
An OPC simplifies management by having a single member, allowing for swift and straightforward decision-making. With no need for consensus among multiple parties, decisions can be made quickly and efficiently. The process is streamlined as the sole member can directly record and sign resolutions in the minute book, eliminating any potential conflicts or delays. This singular structure ensures that the company runs smoothly, providing a clear and conflict-free environment where decisions are implemented without the usual bureaucratic hurdles.
Limited Liability
The OPCs which is a separate legal entity which limits the liability of the shareholder up to the value of their shareholdings. Further, single shareholder is not personally liable for any losses that the OPC incurs during the course of its operations.
Exclusive Benefits
An OPC enjoys various other exemptions, privileges and benefits exclusive to it, which the other types of private companies do not enjoy. Thus, solopreneurs prefer one person company registration.
Eligibility Criteria for One Person Company Registration
The eligibility criteria for one person company registration in India is discussed below:
Checklist for One Person Company Registration
Eligibility Checklist for OPC Registration
Why is an OPC suitable only for small businesses?
Yes, since an OPC is meant for small business operations, it can be converted to a private limited company if its annual turnover limit exceeds Rs. 2 crores. However, it’s important to understand why an OPC is fundamentally suited for smaller ventures:
Single Member Structure: An OPC can only have one member at any given time. This inherently limits its scalability, as additional members cannot join to share responsibilities or bring in new expertise. Limited Capital Raising:Unlike larger business structures, an OPC cannot add more shareholders to raise additional capital. This restriction makes it challenging to finance expansion plans that require significant investment. Growth Constraints:With the business’s growth, an OPC cannot accommodate more members, which can hinder its ability to expand beyond a certain point. This makes it ideal for entrepreneurs who prefer maintaining control without the complexities of a larger business framework. Thus, while an OPC provides a streamlined and manageable structure for small businesses, conversion to a private limited company becomes a practical option as the business surpasses the small-scale operation threshold.
Documents Required for One Person Company Registration
The following documents must be submitted to the Registrar of Companies (ROC) to ensure seamless One Person company registration:
Memorandum of Association (MoA)
Articles of Association (AoA)
Nominee Appointment
Address Proof of Registered Office (Utility bill/ Property deed)
No Objection Certificate from the owner of the premises
Declaration Form INC-9
Consent Form DIR-2
Compliance Certificate
PAN Card/DIN of Directors
Driving License/Aadhar Card of Directors
Passport/Govt IDs/Visa Permit of Foreign National
Latest Bank Statement of Directors
Identity & Address Proof of Shareholders
Step-by-Step Procedure to Register One Person Company
The step-by-step procedure required to register one person company in India is as defined below:
Updates Regulating the Formation of One Person Company
Nominee Name in MoA
As per The Companies (Incorporation) Amendment Rules, 2023, introduced by the MCA, the shareholder of the One Person Company (OPC) is now required to mention the nominee’s name in the Memorandum of Association (MoA) of the OPC.
Features of One Person Company Registration
Have a look over the following features of the one person company registration, as discussed below:
Perpetual Succession
The one person companies registered under the Companies Act, 2013 are businesses with perpetual succession, meaning they can continue even after the death or incapacity of the sole member.
One Member/Shareholder
An OPC is formed with just one member who is also the single shareholder of the company. This feature is unique to OPCs, unlike other types of private companies.
Private Company
An OPC is classified as a type of private company with one single shareholder, as per Section 3(1)(c) of the Companies Act, 2013.
Limited Liability
An OPC registered under the Companies Act, 2013 has separate legal liability, limited to the amount of shareholdings.
One Director
An OPC requires just one director at the time of incorporation, though it can have a maximum of 15 directors.
No Paid-up Share Capital
As per the Companies Act, 2013, an OPC is exempt from producing any minimum paid-up capital at the time of incorporation.
Director Remuneration
OPCs registered under the Companies Act, 2013 are entitled to pay more remuneration to their directors than other companies.
Conversion to a Private Limited Company
The Companies Act, 2013 allows conversion of an OPC into a private limited company if the paid-up share capital exceeds Rs. 50 lakhs or its annual turnover exceeds Rs. 2 crores. However, it’s important to note that recent regulatory changes have impacted these requirements.
In 2021, the Companies (Incorporation) Second Amendment Rules removed the compulsory conversion mandate for OPCs. This means an OPC is no longer required to convert into a private or public company, even if its paid-up capital and average annual turnover exceed previous thresholds. Key Points to Consider:
Voluntary Conversion: While you can choose to convert your OPC if it surpasses certain financial metrics, it is no longer a mandatory step.
Regulatory Update: The 2021 amendment ensures that entrepreneurs have more flexibility in maintaining their OPC status, allowing for continued growth without the pressure of conversion. This regulatory shift provides OPCs with the freedom to expand without undergoing structural changes, making it a favourable option for many small businesses and startups.
What are the mandatory compliance requirements for an OPC?
Post Registration Compliance for One Person Companies
Navigating the compliance landscape for one person companies (OPCs) in India demands...
Annual General Meeting
All OPCs are not mandated to conduct annual general meetings (AGMs) for annual performance reviews or to discuss prospective business strategies. However, other specific compliance tasks are required.
Mandatory Board Meetings
While OPCs are not required to hold AGMs, other companies must conduct at least one board...
Opening an OPC Bank Account
OPCs are required to open a corporate/current bank account under the name of the OPC. The documents submitted for opening must be self-attested with the company seal.
Maintenance of Proper Books of Accounts
It's essential for OPCs to maintain accurate and up-to-date books of accounts as part of their...
Appointment of First Auditor
Directors are legally authorized to appoint the first auditor by filing Form ADT-1 within 30 days of the incorporation of an OPC.
Statutory Audit of Financial Statements
OPCs must conduct a statutory audit of their financial statements to ensure compliance with ...
File Return on Deposits
OPCs are required to file E-form DPT-3 (return on deposits) by June 30 for companies with outstanding loans as of March 31, irrespective of the deposit definition.
Issue of Share Certificate
Shareholders must apply for the issuance of a share certificate within 60 days of the...
Declaration for Business Commencement
Registered OPCs must file Form INC-20A, the Declaration for Business Commencement, within 180 days of incorporation, but before starting business operations.
Filing of Income Tax Returns
The registered OPC holds the sole authority towards managing the operations and making ...
Filing of Income Tax Return
The registered OPC holds the sole authority towards managing the operations and making decisions for the efficient company management without conflicts or delays. Therefore, it is easy to pass the ordinary and special resolutions by simply entering them into the minute book.
Compliance with GST and Other Laws
Depending on the business structure, OPCs must comply with standards related to Goods and...
Compliance with GST and Other Laws
Depending on the business structure, OPCs must comply with standards related to Goods and Services Tax (GST), labor codes, and other legal provisions. By adhering to these requirements, you ensure that your OPC remains compliant and operates smoothly within the legal framework.
Filing of Annual Return and Statements
The one person companies are legally authorized to prepare and annually file the signed annual ...
Filing of Annual Return and Statements
The one person companies are legally authorized to prepare and annually file the signed annual returns/ reports (Form MGT-7) and annual statements (Form AOC-4) to the Registrar of the Companies.
Compliance with GST and Other Laws
Based on the type of business structure, the one person companies are required to comply with...
Compliance with GST and Other Laws
Based on the type of business structure, the one person companies are required to comply with the standards defining the Goods and Services Tax (GTS), code for labour, and other legal provisions.Exemptions for Single Person Company Registration Compliance
A single person company registration has gained prominence in recent times. Get a glimpse of the exemptions for single person company registration compliance-
Major Exemptions
OPC is free from legal obligations to hold an annual general meeting as per the Companies Act, 2013.
In case of one person company, no prior notice of the board meeting is needed.
The financial statements of the OPC are not bound to entail cash flow statements.
Other Exemptions
In the board meetings of OPC, a quorum is not required.
In the board meetings of OPC, voting is not required.
OPCs are exempt from a full statutory audit. However, a review report is needed.
One Person Company Vs Sole Proprietorship
However, both one person company and sole proprietorship are single person company registered in India, there exists a clear difference between the two business lines.:
| Aspects | One Person Company | Sole Proprietorship |
|---|---|---|
| Registered | Under the Ministry of Corporate Affairs and Companies Act, 2013 | Not a registered entity |
| Legal Status | Distinct/ Separate Legal Entity | No Separate Legal Entity |
| Liability | Limited Liability | Unlimited Liability |
| Management Structure | Separate Management Structure | No Separate Management Structure |
| Compliance | Greater Compliance | Less Compliance |
| Perpetual Succession | Perpetual Existence | Limited Period Existence |
| Transferability | Transferred to Nominee | Cannot be transferred |
| Taxation | Taxed at 30% of profit plus cess and surcharge | Taxed as an individual |
| Annual Filings | Filed with the Registrar of Companies | Income Tax returns filed with the Registrar of Companies |
Other Regulatory Compliance for One-Person Company
The other regulatory compliances for one person company include the following requirements as discussed below:
Must mention the words “One Person Company” below its name
Must apply for GST registration in India
Must classify an OPC as a private company under s/ 2 (68) of the Companies Act, 2013
Must have a single director, unlike private limited companies
Exempt from preparing a cash flow statement
AoA must contain provisions for entrenchment
Reasons to Trust Rajtax for OPC Registration Online
Network of 500+ Consultants
As we have developed a healthy network of 500+ business consultants, we ensure that your OPC registration online is easy and hassle-free.
99% Success Rate
Our expert consultants have successfully maintained a 99% success rate in single person company registration, the best in the trade.
Expert Consultation
We provide expert consultation services for securing your one person company registration in India.
Document Preparation
We ensure the preparation and filing of all the necessary documents required for obtaining DSC, DIN, TAN, PAN and OPC registration certificates.
Legal Compliance
We ensure legal compliance with the regulations and other legal provisions, optimizing the operations for maximum efficiency and profitability.
Statutory Filing
Our dedicated experts assist in the statutory filing of the necessary forms required for the successful incorporation of one person company in India.
Name Search Assistance
We assist the applicants in conducting the name search and approval for the businesses.
Contract Drafting and Negotiation
We also provide services for the drafting and negotiation of necessary contracts and agreements on behalf of the company.
Conversion Service
We also provide services for the conversion of a one person company to a private limited company only upon the fulfilment of mandatory criteria as defined under the Companies Act, 2013.
One- Stop Corporate Solution
We provide a one- stop corporate solution associated with the incorporation of one person company under the Companies Act, 2013.
Dispute Resolution
We also provide services for resolving disputes of legal or other nature arising during the course of business operations.
Frequently Asked Questions about OPC registration
Have a look at answers to the most frequently asked questions about OPC registration.
What is a One Person Company (OPC)?
Can a single person register a company?
What are the benefits of one person company registration?
One Person Company is a type of a private limited company formed by one shareholder that enjoys the benefits such as status of a separate legal entity, limited liability, credibility and tax benefits.
Can an OPC be converted to a private limited company?
Yes, since an OPC is meant for small business operations, it can be converted to a private limited company if its annual turnover limit exceeds Rs. 2 crores.
How long does it take to register an OPC in India?
It usually takes between 7 to 10 working days to register an OPC in India, subject to document verification and approval.
Can an NRI incorporate an OPC in India?
Who is eligible for One person company registration?
The natural and legal Indian citizens and non-resident Indians are eligible for one person company registration in India. In order to register one person company in India, it’s essential to understand the requirements.
How do I set up a one person company?
Which is better, OPC or PVT Ltd?
OPC which stands for one person company are suitable for single entrepreneurs looking for limited liability, whereas, LLP is beneficial for businesses having multiple shareholders and seeking flexibility in their limited liability.
Authors
Written by Aarya Pokharel. Last updated on Jul 12 2025, 03:34 PM
Aarya Pokharel brings 3 years of solid experience in legal research and compliance. Her expertise spans tax filing, secretarial compliances, and advisory services, with a strong focus on delivering precise legal research and strategic advisory support.