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One Person Company (OPC)

One Person Company

The concept of One Person Company (OPC) was first recommended by Dr. JJ Irani Committee in the year 2005. And it has now been introduced in India in 2014, through Section 2(62) of Companies Act 2013. Though this concept is new in India but it is already exists in many countries like Australia, China, Pakistan, UK etc. OPC will bring flexibility to an Individual or Professional to manage its business efficiently and at the same time allows them to enjoy the benefits of a Company. It will be easier for entrepreneurs to approach Banks and Financial Institutions for funding and will also provide protection for business Limited Liability in the name of a separate legal entity.

An individual willing to incorporate an OPC has to provide the following information:

a.            Name of the OPC

b.            Nature of the activities of OPC

c.             A nominee to take place of the single member

The member of an OPC has to choose a nominee and the nominee's written consent should be filed with the Registrar of Companies (ROC). The nominee in the event of death or in the event of any other incapacity of the member shall become the member of an OPC. The member of an OPC at any time can change the name of the nominee providing a notice to the ROC in such manner as prescribed. On account of Death of a member, the nominee is automatically entitled for all shares and liabilities of OPC. Therefore, business of an OPC will not come to an end on the death of the Member of OPC.

OPC can be formed as a Company limited by shares or Company limited by guarantee. If limited by shares, it has to comply with the following requirements:

a.            It shall have a minimum paid up capital of Rs. 1, 00,000/-

b.            Restricts the right to transfer its shares

c.             Prohibits any invitation to the public to subscribe for the securities of the Company


It is important to note that the new Act classifies OPC as a Private Company for all the legal purposes; therefore all the provisions related to a private Company are applicable to an OPC unless otherwise expressly excluded. But, there are certain privileges' and exemptions which are not available to private companies. Some of the exemptions are:

  • As per Section 92 of the Companies Act, 2013, the annual returns in case of OPC shall be signed by the Company Secretary or where there is no Company Secretary, then by the Director of the Company.
  •  OPC shall file with the ROC a copy of financial statements duly adopted by its member along with all the supporting which is required to be attached to such financial statement, within 180 days from the closure of the financial year along with cash flow statements.
  • The financial statements along with the supporting shall be signed by only one director and Annual Return shall be signed by Company Secretary and Director, and in case if there is no Company Secretary then only by the Director.
  • An OPC having more than one Director shall be deemed to have complied with the provisions of the Section 173 if at least one meeting of the Board of directors has been conducted in each of half calendar year and the gap between the two meetings is not less than ninety days.


  • However, if an OPC fails to file its annual return with the Registrar in accordance with the provisions of the Act, the company shall be punishable with fine and every officer of the company who is in default shall be punishable imprisonment or with fine or with both.

The purpose of OPC is to promote the proprietorship form of business, enabling them to commence business with limited personal liability as compared to unlimited personal liability as in the case of Sole Proprietorship. OPC will open many avenues for more favorable banking facilities, particularly loans to such proprietors and will reduce the paper work as well.

OPC`s are imperative because they will provide a platform to participate in the Economic activities of the country and is expected to attract investors who were earlier afraid to take risk in doing investments in Sole Proprietorship Business due to unlimited liability.

Differences between this and a Private Limited Company:-

Difference 1: Only 1 Director is necessary in the case of a OPC, unlike a Private Limited Company which needs to have atleast 2 Directors. In the case of a OPC, it can have a maximum of 15 Directors, while in the case of a Limited Company, it can have upto 50 Directors.

Difference 2:  An OPC is open only to naturally born Indians, and people of foreign origin or foreigners cannot open a One Person Company. A foreigner has to still open a normal Private Limited Company.

Difference 3: A One Person Company need not hold any Annual General Meeting or pass any board resolutions. All that the member needs to do is to record all the proceedings in a minutes book.


Conclusion: One Person Company (OPC) will definitely encourage more proprietors to start a One Person Company instead of forming a Proprietorship firm.

Please write your OPC related Query here