One Person Company (OPC) — Empowering Solo Founders with Limited Liability
The OPC lets solo entrepreneurs run a full-fledged company with limited liability, separate legal identity and greater credibility than a proprietorship.
Introduction
If you’re a consultant, freelancer, trader or solo startup founder, an OPC provides legal recognition, limited liability, tax advantages and stronger access to credit and contracts. This guide by RegistrationMART (10+ years’ experience) covers legal rules, eligibility, documentation, process, taxation, compliance and strategic tips.
Legal Framework & Definition
Companies Act, 2013 — Section 2(62)
An One Person Company (OPC) is a company with only one member. It enjoys the benefits of a private company — limited liability, separate legal entity and perpetual succession — while being owned and controlled by a single person.
Regulated by: Ministry of Corporate Affairs (MCA), Registrar of Companies (ROC). Governed by Companies (Incorporation) Rules, 2014.
Key Features of OPC
| Legal Status | Separate legal entity |
|---|---|
| Ownership | Single shareholder |
| Liability | Limited to paid-up capital |
| Control | One director (max 15) |
| Name Suffix | Must end with “(OPC) Private Limited” |
| Conversion | Convert to Pvt Ltd after 2 years or earlier if thresholds exceeded |
Who Can Register an OPC?
| Nationality | Only Indian citizens |
|---|---|
| Residency | Resident in India (at least 120 days in a financial year) |
| Number of OPCs | One person cannot form more than one OPC |
| Age | Above 18 years |
| Restricted Businesses | Not for NBFCs, certain investment, or charitable activities |
Note: NRIs cannot incorporate OPCs under current law.
Documents Required for OPC Registration
Promoter / Director (Individual)
- PAN card
- Aadhaar card (or Voter ID / Passport / Driving License)
- Passport-sized photograph
- Email ID & mobile number
Registered Office Proof
- Electricity / gas bill (not older than 2 months) or rent agreement or sale deed
- NOC from owner if property is rented
Nominee Documents
- Consent (Form INC-3)
- PAN & Aadhaar of nominee
- Address proof of nominee
The nominee becomes the member if the promoter dies or is incapacitated.
Step-by-Step OPC Registration Process
- Digital Signature Certificate (DSC) — Obtain a DSC for the proposed director to sign forms electronically.
- Name Reservation (Part A of SPICe+) — File Part A with the suffix “(OPC) Private Limited”. Use MCA Name Search and Trademark search before finalizing.
- Filing SPICe+ (Part B) — Submit incorporation details, nominee details (INC-3), PAN/TAN/EPFO/ESIC via AGILE-PRO, E-MOA & E-AOA, DIR-2 for consent, INC-8 declaration by professional. DIN is allotted during incorporation.
- Certificate of Incorporation — After verification, MCA issues Incorporation Certificate containing CIN, PAN & TAN and registered address. OPC is legally active.
Compliance Requirements for OPC
| Appointment of Auditor | Within 30 days of incorporation |
| Annual Return | MGT-7A (simplified) |
| Financial Statements | AOC-4 |
| Income Tax | ITR-6 annually |
| Director KYC | DIR-3 KYC for DIN holder |
| Board Meetings | At least one meeting each half-year (OPCs have relaxations vs Pvt Ltd) |
Note: AGM is not mandatory for OPCs. Other laws (GST, MSME, PT, PF) apply as per business activity.
Taxation of OPCs
| Corporate Tax | 22% (new regime, subject to eligibility) |
| Surcharge | Applicable as per income slab (example: 10% if income > ₹1 cr) |
| Cess | Health & Education Cess 4% |
| GST | Mandatory if turnover exceeds threshold or for interstate supply |
OPCs are taxed as companies (not as proprietorship) under the Income Tax Act, 1961.
Benefits of OPC Registration
- Limited liability — personal assets protected
- Better access to bank loans and government schemes
- Legal recognition builds credibility
- Single control — no partner disputes
- Simple conversion to Pvt Ltd when business grows
- Business continuity through nominee
- Corporate tax efficiency vs personal tax slabs
Disadvantages & Restrictions
- One OPC rule — one person cannot form more than one OPC
- Higher compliance than sole proprietorship
- Restricted fundraising — cannot issue shares to multiple members
- Mandatory conversion if turnover > ₹2 crore or paid-up capital > ₹50 lakh
Case Study: Consultant Turned Company
Riya Kapoor — RiyaKap OPC Pvt Ltd (Pune)
- Profession: UX Consultant
- Incorporated: March 2022
- Turnover: ₹80 lakh by 2024
- Outcomes: Won ₹25L+ corporate contracts, registered as MSME, later converted to Pvt Ltd and onboarded investor
“Registering as an OPC gave my freelance practice a professional edge.”
FAQs on OPC Registration
- Q1: Can an NRI incorporate an OPC?
- No — only Indian citizens who are residents can form OPCs.
- Q2: Can the same person be both director & shareholder?
- Yes — an OPC is structured for single-person ownership and control.
- Q3: Can an OPC issue equity to others?
- No — conversion to Private Limited is required to onboard shareholders.
- Q4: How is the nominee appointed?
- The nominee is appointed at incorporation via Form INC-3 and must provide KYC & consent.
- Q5: Can I convert OPC to Pvt Ltd?
- Yes — voluntarily at any time or mandatorily if turnover > ₹2 crore or capital > ₹50 lakh.
Why Choose RegistrationMART for OPC Setup?
| Legal Compliance | 100% accurate filings with CA/CS review |
| Fast Process | OPC setup in 5–7 working days |
| End-to-End Support | Name search, DSC, SPICe+ filing, PAN/TAN, GST & bank setup |
| Conversion Help | OPC → Pvt Ltd conversion handled seamlessly |
