A One Person Company (OPC) is a type of private limited company that allows a single entrepreneur to operate a corporate entity with limited liability. This business structure is particularly beneficial for solo entrepreneurs who want to enjoy the benefits of a corporate structure without requiring a second shareholder.
Key Features of One Person Company (OPC)
- Single Owner – Unlike other private limited companies that require at least two shareholders, OPC can be owned and managed by one person.
- Limited Liability – The owner's personal assets are protected from business liabilities.
- Separate Legal Entity – OPC has a distinct legal identity separate from its owner.
- Perpetual Succession – In case of the owner's death or incapacity, a nominee (appointed during incorporation) takes over the business.
- Less Compliance – Compared to other companies, an OPC has fewer regulatory requirements.
- No Minimum Capital Requirement – There is no mandatory minimum capital, making it accessible for small entrepreneurs.
- Tax Benefits – OPC is taxed as a private limited company, potentially offering tax advantages over sole proprietorships.
Eligibility for OPC Registration
- Only one individual can be the shareholder and director.
- The owner must be an Indian citizen and resident.
- The owner must nominate another person to take over in case of death/incapacity.
- Certain businesses like non-banking financial services cannot register as an OPC.
Disadvantages of OPC
- Cannot raise equity funding (since only one person can be the shareholder).
- Conversion to a private/public limited company is required if annual turnover exceeds ₹2 crores.
- Compliance, while lesser than a private limited company, is still higher than a sole proprietorship.
Documents required for One Person Company
1. Documents of the Sole Director & Shareholder (Since OPC has only one member)
⇒ Identity Proof (Any One)
• PAN Card (Mandatory)
• Passport (For Foreign Nationals)
⇒ Address Proof (Any One, Not Older Than 2 Months)
• Aadhaar Card
• Voter ID
• Driving License
• Passport
⇒ Residential Proof (Any One, Not Older Than 2 Months)
• Bank Statement
• Electricity Bill
• Telephone Bill
⇒ Email ID & Mobile Number of the director
⇒ Passport-size Photograph of the director
⇒ Digital Signature Certificate (DSC) of the director (Required for online filing)
⇒ Director Identification Number (DIN) (Can be applied during registration)
⇒ Nominee Details (Mandatory) – A nominee must be appointed in case of the sole director’s incapacity
• Identity Proof (PAN Card, Passport, etc.)
• Address Proof (Aadhaar Card, Voter ID, etc.)
• Consent of Nominee in Form INC-3
2. Company-Related Documents
⇒ Proposed Name of the Company (At least 2 name options for approval via RUN service in MCA)
⇒ Memorandum of Association (MoA) – Defines the company’s objectives
⇒ Articles of Association (AoA) – Lays down rules & regulations governing the company
⇒ Declaration by the Director (INC-9 & DIR-2) – Self-declaration of compliance
⇒ Consent to Act as Director (DIR-2 Form)
⇒ Proof of Registered Office Address (Any One, Not Older Than 2 Months)
• Electricity Bill
• Telephone Bill
• Rent Agreement + NOC from Landlord (if rented)
• Property Tax Bill (if owned)
⇒ Proof of Business Address (If different from registered address)
⇒ Bank Account Proof (Once Company is Incorporated)
• Copy of bank statement or cancelled cheque in the company’s name
3. Additional Requirements (For Foreign Directors/Shareholders)
⇒ Notarized & Apostilled/Legalized Passport Copy
⇒ Notarized & Apostilled Address Proof