One Person Company (OPC)
The OPC concept, introduced by the Companies Act, 2013, empowers solo entrepreneurs by allowing a single individual to establish a company with a separate legal entity status and limited liability. An OPC is a private company with one member and at least one director.
Benefits of OPC Registration:
- Limited Liability: The director's personal assets are protected from business debts.
- Perpetual Succession: Through a nominee, the company continues to exist even after the member's death or incapacity.
- Greater Credibility: As a registered company, an OPC is viewed as more credible than an unregistered proprietorship.
- Fewer Compliances: An OPC enjoys several exemptions and has a lower compliance burden than a private limited company.
How to Register an OPC:
- Apply for DSC and Director Identification Number (DIN).
- Get the OPC name approved via the SPICe+ application. The name must include “(One Person Company)”.
- Appoint a nominee and file their written consent.
- Draft the Memorandum of Association (MoA) and Articles of Association (AoA).
- File the incorporation application with the Registrar of Companies (ROC).
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Who can form an OPC?
Only a natural person who is an Indian citizen and resident in India can form an OPC. A person can only be a member of one OPC at a time.
What is a "Nominee" in an OPC?
The OPC must appoint a “nominee” who will become the member of the company in case of the original member’s death or incapacity. The nominee must also consent to this.
Can an OPC have more than one director?
Yes, an OPC must have at least one director (who is usually the member), but it can have up to 15 directors for operational purposes.
When must an OPC convert to a Private Limited Company?
Conversion is mandatory if the OPC’s paid-up share capital exceeds ₹50 lakhs or its average annual turnover exceeds ₹2 crores. It can also convert voluntarily.