Want to start a business alone with limited liability protection? One Person Company (OPC) is the perfect business structure for solo entrepreneurs in India. This comprehensive guide covers everything about OPC registration.
What is a One Person Company (OPC)?
A One Person Company is a unique business structure introduced under the Companies Act, 2013 that allows a single person to own and operate a company. It combines the benefits of a sole proprietorship (single ownership) with the advantages of a private limited company (limited liability and separate legal entity).
OPC is ideal for solo entrepreneurs who want to run their business independently while enjoying the benefits of corporate structure and limited liability protection.
Key Characteristics of OPC
- Single Member: Only one person can be the shareholder and director
- Limited Liability: Personal assets are protected from business liabilities
- Separate Legal Entity: Company has its own legal identity
- Nominee Requirement: Must nominate a person who becomes member in case of death/incapacity
- Perpetual Succession: Company continues even if the owner passes away
- No Minimum Capital: Can start with any amount of capital
Benefits of OPC Registration
1. Single Ownership with Limited Liability
The most significant advantage of OPC is that a single person can enjoy limited liability protection. Your personal assets like home, car, and savings are protected from business debts and liabilities.
Example: If your OPC has a debt of Rs. 30 lakhs but you've invested only Rs. 1 lakh as capital, creditors cannot claim your personal assets for the remaining Rs. 29 lakhs.
2. Separate Legal Entity
An OPC is a separate legal entity that can:
- Own property in its own name
- Enter into contracts
- Sue and be sued
- Open bank accounts
- Apply for loans and credit facilities
3. Easy Access to Funding
Unlike sole proprietorship, an OPC can:
- Get bank loans more easily (banks prefer lending to companies)
- Apply for government schemes and subsidies
- Convert to Private Limited Company for equity funding
4. Credibility and Trust
Having "Private Limited" in your company name adds credibility with:
- Customers and clients
- Vendors and suppliers
- Banks and financial institutions
- Government departments
5. Tax Benefits
OPCs enjoy corporate tax benefits:
- Flat corporate tax rate of 25% (22% under new regime for eligible companies)
- Various business deductions available
- Startup tax exemptions if eligible
6. Lower Compliance than Pvt Ltd
Compared to Private Limited Company, OPC has relaxed compliance:
- No mandatory requirement for first board meeting within 30 days
- Only 2 board meetings required per year (gap not exceeding 6 months)
- Cash flow statement not required for OPCs
- Annual return can be signed by Company Secretary or the director
OPC vs Sole Proprietorship vs Private Limited
| Feature | Sole Proprietorship | OPC | Private Limited |
|---|---|---|---|
| Owners | 1 | 1 | 2-200 |
| Liability | Unlimited | Limited | Limited |
| Separate Entity | No | Yes | Yes |
| Registration | Optional | Mandatory | Mandatory |
| Compliance | Low | Medium | High |
| Funding Access | Limited | Better | Best |
| Taxation | Individual rates | Corporate rate | Corporate rate |
| Perpetual Existence | No | Yes | Yes |
Eligibility for OPC Registration
For the Member (Shareholder)
- Must be a natural person (not a company or LLP)
- Must be an Indian citizen
- Must be a resident of India (stayed in India for at least 182 days in the previous year)
- Can be a member in only one OPC
- Cannot be a minor
For the Director
- The member can also be the sole director
- Director must be at least 18 years old
- Must have a valid PAN and Aadhaar
- Must not be disqualified under Companies Act
- Need Digital Signature Certificate (DSC) and Director Identification Number (DIN)
For the Nominee
- Must be a natural person
- Must be an Indian citizen and resident
- Must give written consent to become member in case of death/incapacity of the original member
- Cannot be a minor
Documents Required for OPC Registration
For the Member/Director
| Document | Purpose |
|---|---|
| PAN Card | Identity proof and tax identification |
| Aadhaar Card | Address proof and identity verification |
| Passport-size Photograph | For DIN and DSC applications |
| Bank Statement / Utility Bill | Address proof (not older than 2 months) |
| Mobile Number & Email | For OTP verification and communication |
For the Nominee
| Document | Purpose |
|---|---|
| PAN Card | Identity proof |
| Aadhaar Card | Address proof |
| Photograph | For identification |
| Consent Letter (INC-3) | Written consent to act as nominee |
For Registered Office
- Owned Property: Property deed/sale deed + latest utility bill
- Rented Property: Rent agreement + NOC from landlord + landlord's identity proof + latest utility bill
Step-by-Step OPC Registration Process
Step 1: Obtain Digital Signature Certificate (DSC)
The sole director needs a Class 3 DSC for digitally signing documents. Process takes 1-2 days.
Step 2: Name Reservation (RUN - Part A of SPICe+)
Reserve your company name through the SPICe+ Part A form. You can suggest up to 2 name choices.
Name Guidelines:
- Must be unique and not similar to existing companies
- Cannot infringe on trademarks
- Must end with "(OPC) Private Limited"
- Should indicate the nature of business
Step 3: File SPICe+ Part B (Incorporation Form)
The SPICe+ form includes:
- Company incorporation application
- DIN allotment for director
- PAN and TAN application
- GST registration (optional)
- EPFO and ESIC registration (optional)
Step 4: Submit Nominee Consent (INC-3)
Submit the nominee's consent in Form INC-3 along with the incorporation form.
Step 5: Certificate of Incorporation
Upon approval, you'll receive:
- Certificate of Incorporation (CoI)
- Company Identification Number (CIN)
- PAN and TAN
- DIN for director
OPC Registration Fees
Government Fees
| Component | Fee (Approx.) |
|---|---|
| Name Reservation (RUN) | Rs. 1,000 |
| SPICe+ Filing Fee | Rs. 500 - Rs. 2,000 (based on capital) |
| Stamp Duty | Varies by state (Rs. 1,000 - Rs. 10,000) |
| DSC | Rs. 1,500 - Rs. 2,000 |
Total Cost with LegalX India: Rs. 7,999 - Rs. 14,999 (depending on package and state)
Timeline for OPC Registration
| Stage | Duration |
|---|---|
| DSC Issuance | 1-2 days |
| Name Approval | 1-2 days |
| Document Preparation | 1-2 days |
| SPICe+ Filing & Approval | 3-5 days |
| Total | 7-12 working days |
Post-Incorporation Compliance Requirements
Annual Compliance
| Compliance | Due Date | Form |
|---|---|---|
| Annual Return | Within 60 days of AGM | MGT-7A |
| Financial Statements | Within 30 days of AGM | AOC-4 |
| Income Tax Return | September 30 | ITR-6 |
| Director KYC | September 30 | DIR-3 KYC |
| Board Meetings | Minimum 2 per year | - |
Conversion of OPC
Mandatory Conversion to Private Limited
An OPC must mandatorily convert to a Private Limited Company if:
- Paid-up capital exceeds Rs. 50 lakhs, OR
- Average annual turnover exceeds Rs. 2 crores
Frequently Asked Questions
Can NRIs register an OPC in India?
No, only Indian citizens who are residents of India (182+ days stay) can register an OPC.
Can I have multiple OPCs?
No, a person can be a member of only one OPC at a time.
What happens if the sole member dies?
The nominee automatically becomes the member and can continue the business or transfer it.
Can an OPC raise equity funding?
OPCs cannot have more than one member. To raise equity, convert to Private Limited Company first.
Is audit mandatory for OPC?
Yes, statutory audit is mandatory for all OPCs regardless of turnover.
Why Choose LegalX India for OPC Registration?
- Expert Team: Qualified CAs and CSs with extensive experience
- Fast Processing: OPC registration in 7-12 working days
- Transparent Pricing: No hidden charges, all government fees included
- End-to-End Support: From documentation to post-incorporation compliance
- Free Consultation: Expert guidance to choose the right business structure
Conclusion
One Person Company is the ideal business structure for solo entrepreneurs who want limited liability protection without the complexities of a full-fledged private limited company. It offers the best of both worlds - single ownership with corporate benefits.
Whether you're a freelancer, consultant, service provider, or small business owner, OPC provides the perfect legal structure to protect your personal assets while building a credible business.
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Register Now - Starting at Rs. 7,999Written by
CA Rahul Sharma
Chartered Accountant with 12+ years of experience in company registration and corporate compliance.