One Person Company (OPC)

A One Person Company (OPC) is a form of business entity that allows a single entrepreneur to operate a company with limited liability protection. It was introduced in the Companies Act, 2013 to encourage sole proprietors to form companies.

Key Features

• Single Member: Only one shareholder who is also the director
• Limited Liability: Member's liability limited to share value
• Nominee Required: Must nominate a person who becomes member on death/incapacity
• Perpetual Succession: Continues through nominee
• Simplified Compliance: Fewer meetings and filing requirements

Eligibility (Post 2021 Amendment)

CriteriaRequirement CitizenshipIndian citizen OR Indian resident (NRIs eligible) Residency120+ days in India (if resident) Other OPCCannot be member/nominee in another OPC MinorCannot be member or nominee Paid-up CapitalNo limit (earlier Rs. 50 lakhs) TurnoverNo limit (earlier Rs. 2 crores)

OPC vs Sole Proprietorship

AspectOPCSole Proprietorship Legal EntitySeparate entitySame as owner LiabilityLimitedUnlimited ComplianceCompany law complianceMinimal CredibilityHigherLower SuccessionThrough nomineeNo continuity Tax Rate25% corporate rateIndividual slab rates

Conversion

OPC can be converted to Private Limited Company voluntarily or mandatorily if:

• Paid-up capital exceeds Rs. 50 lakhs, OR
• Turnover exceeds Rs. 2 crores for 3 consecutive years