One Person Company Registration In India
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- We reserve the name of your company and help you obtain a DSC and DIN.
- We draft and file the documents required for your OPC registration (MoA, AoA, PAN, & TAN).
- We help you with the post-registration formalities and compliances.
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One Person Company (OPC) Overview
A One Person Company (OPC) is a type of business entity that allows a single individual to own and operate a company while enjoying the benefits of limited liability. This structure was introduced in India under the Companies Act, 2013, to encourage entrepreneurship and provide a formal business structure to sole proprietors.
Key Features
Single Owner:
- An OPC can be owned and managed by a single person, allowing complete control over the business.
Limited Liability:
- The liability of the owner is limited to the unpaid amount on the shares held by them, protecting personal assets from business debts.
Separate Legal Entity:
- An OPC is considered a separate legal entity, distinct from its owner. It can own property, enter contracts, and sue or be sued in its name.
Minimum Capital Requirement:
- There is no minimum paid-up capital requirement for an OPC, making it accessible for entrepreneurs with limited resources.
Restrictions on Conversion:
- An OPC cannot convert to another type of company (like a private limited company) until its paid-up capital exceeds ₹50 lakhs or its average annual turnover exceeds ₹2 crores.
Mandatory Appointment of a Nominee:
- The owner must appoint a nominee who will take over the business in case of the owner’s death or incapacity. The nominee should be a resident of India.
Compliance Requirements:
- OPCs have fewer compliance requirements compared to other company structures, making it easier for solo entrepreneurs to manage.
Benefits
Ease of Formation:
- Setting up an OPC is relatively simple and requires fewer documents compared to private limited companies.
Full Control:
- The sole owner retains complete control over the operations and decisions of the company.
Limited Liability Protection:
- Personal assets are safeguarded, providing peace of mind to the owner.
Tax Benefits:
- OPCs can avail of various tax benefits similar to other corporate structures.
Credibility:
- Incorporating as an OPC enhances credibility with clients and suppliers compared to operating as a sole proprietorship.
Requirements for Incorporating a One Person Company (OPC)
Incorporating a One Person Company (OPC) involves several key requirements. Here’s a concise breakdown of what is needed:
1. Minimum Requirements
Single Member:
- Must have only one individual as the shareholder.
Director:
- Must have one director, who can also be the sole shareholder. The director must be a resident of India.
Nominee:
- A nominee must be appointed, who will take over in the event of the owner’s death or incapacity. The nominee should also be a resident of India.
2. Required Documents
For the Sole Member/Director
Identity Proof:
- A government-issued ID, such as:
- Aadhaar card
- Passport
- Voter ID
- Driver’s license
- A government-issued ID, such as:
Address Proof:
- A document proving the residential address, such as:
- Utility bill (not older than three months)
- Bank statement
- Rent agreement
- A document proving the residential address, such as:
Passport-Sized Photograph:
- A recent passport-sized photograph of the member/director.
For the Company
Memorandum of Association (MoA):
- A document stating the objectives and the name of the OPC.
Articles of Association (AoA):
- A document outlining the internal management rules of the company.
Registered Office Address Proof:
- Proof of the registered office address, which could include:
- Rent agreement (if rented)
- Sale deed (if owned)
- NOC from the property owner (if applicable)
- Proof of the registered office address, which could include:
Digital Signature Certificate (DSC):
- Required for electronic filing and signing of documents.
Director Identification Number (DIN):
- Each director must obtain a DIN from the Ministry of Corporate Affairs (MCA).
Types of One Person Company (OPC)
While the concept of a One Person Company (OPC) primarily refers to a single ownership structure, it can be categorized based on certain characteristics and purposes. Here are the different types of OPCs:
1. Based on Ownership Structure
- Single Member OPC:
- A One Person Company owned and operated by a single individual. The sole member has complete control over business decisions.
2. Based on Nature of Business
Service-Based OPC:
- An OPC that primarily provides services, such as consulting, IT services, or personal services.
Product-Based OPC:
- An OPC that manufactures or sells goods, engaging in retail or wholesale activities.
3. Based on Industry Focus
IT/Software OPC:
- Focused on software development, technology services, or IT consulting.
E-commerce OPC:
- Operates primarily in the online space, selling products or services through digital platforms.
Manufacturing OPC:
- Engaged in the production of goods across various sectors, including textiles, electronics, or food processing.
4. By Registration Status
Non-Government OPC:
- Owned by a private individual without government ownership or control.
Government OPC:
- An OPC where the government or a government agency holds ownership or significant control.
5. By Special Purpose
Non-Profit OPC:
- Formed for charitable activities or social causes, with profits reinvested into the organization rather than distributed.
Start-Up OPC:
- Designed for new ventures focusing on innovation and scalable business models, often in technology or service sectors.
Documents Required for One Person Company (OPC) Registration
Incorporating a One Person Company (OPC) requires specific documentation to ensure compliance with legal requirements. Here’s a detailed list of essential documents needed for the registration process:
1. For the Sole Member/Director
Identity Proof:
- One of the following government-issued documents:
- Aadhaar Card
- Passport
- Voter ID
- Driving License
- One of the following government-issued documents:
Address Proof:
- A document verifying the residential address, which can include:
- Utility Bill (electricity, water, gas, etc. — not older than three months)
- Bank Statement
- Rent Agreement (if applicable)
- A document verifying the residential address, which can include:
Passport-Sized Photographs:
- Recent passport-sized photographs of the member/director.
2. For the Nominee
Identity Proof:
- One of the following:
- Aadhaar Card
- Passport
- Voter ID
- Driving License
- One of the following:
Address Proof:
- A recent document verifying the address, such as a utility bill or bank statement.
Consent Letter:
- A signed consent letter from the nominee agreeing to act as a nominee in case of the owner’s demise or incapacity.
3. For the Company
Memorandum of Association (MoA):
- A legal document that states the company’s objectives, name, registered office address, and share capital.
Articles of Association (AoA):
- A document outlining the internal rules and regulations governing the company.
Registered Office Address Proof:
- Proof of the registered office address, which can be:
- Rental Agreement (if rented)
- Sale Deed (if owned)
- No Objection Certificate (NOC) from the property owner (if applicable).
- Proof of the registered office address, which can be:
Digital Signature Certificate (DSC):
- A certificate required for electronic filing of documents.
Director Identification Number (DIN):
- Each director must obtain a DIN from the Ministry of Corporate Affairs (MCA).
4. Additional Documents (if applicable)
Bank Account Statement:
- A recent bank statement of the registered office address.
Affidavit:
- An affidavit declaring compliance with the eligibility requirements to incorporate as an OPC.
Sample Certificate
FAQs
A One Person Company (OPC) is a type of business entity that allows a single individual to own and operate a company with limited liability. It combines the advantages of sole proprietorship and corporate structure, offering legal recognition and liability protection.
Any Indian citizen who is at least 18 years old and a resident of India can form an OPC. There can only be one member (owner) in an OPC.
Key advantages include:
- Limited liability protection for the owner.
- Single ownership and control over the business.
- Less compliance burden compared to private limited companies.
- Separate legal entity status, allowing the company to own property and enter contracts.
Disadvantages include:
- Limited funding options, as an OPC cannot issue shares to the public.
- The requirement to appoint a nominee, which complicates ownership transitions.
- Restrictions on converting to other types of companies until certain thresholds are met.
An OPC requires a minimum of one director and one shareholder, who can be the same person. However, it must also appoint a nominee who can take over in case of the owner’s death or incapacity.