What is OPC (One Person Company) and How to Register It? | Legal24by7

A One Person Company (OPC) is a unique business structure introduced under the Companies Act 2013 that allows a single entrepreneur to run a company with limited liability protection — something a sole proprietorship cannot offer. It combines the simplicity of a one-person business with the legal protection and credibility of a Private Limited Company. If you are a solopreneur or first-time founder, OPC is worth understanding seriously before you decide on your structure.

Opc Registration Company Registration

Step-by-Step Process

What makes OPC different from a sole proprietorship?

A sole proprietorship and an OPC are both owned and run by a single person, but they are legally very different. In a sole proprietorship, there is no legal distinction between you and your business — all your personal assets (savings, property, car) are at risk if the business faces a lawsuit or debt. In an OPC, the company is a separate legal entity. Your personal liability is limited to the amount you have invested as share capital. Your personal assets cannot be touched by creditors of the company. Additionally, OPC gives you a Corporate Identity Number (CIN), which adds credibility with banks, clients, and government agencies.

Who can register an OPC and what are the restrictions?

To register an OPC in India: you must be an Indian citizen and resident (stayed in India for 182+ days in the previous calendar year). A person can be the member of only ONE OPC at a time. A minor cannot be a member or nominee. An OPC cannot carry out Non-Banking Financial Investment activities. If the annual turnover of an OPC exceeds 2 crore or paid-up capital exceeds 50 lakh, it must mandatorily be converted into a Private Limited Company within 6 months.

Step 1 — Obtain DSC and apply for DIN

Get a Digital Signature Certificate (DSC) for the sole director — cost is 1,000–2,000 from a certified authority. Then apply for a Director Identification Number (DIN) through the SPICe+ incorporation form. DIN is free when obtained through SPICe+. You also need to appoint a nominee at this stage — this person takes over the company if the sole member dies or becomes incapacitated. The nominee must give consent in Form INC-3.

Step 2 — Reserve name and file SPICe+

Check name availability on the MCA V3 portal. Names must not be identical or similar to existing companies. Reserve via Part A of SPICe+. Then file Part B with all documents: draft MoA and AoA, PAN, Aadhaar, address proof of the director and registered office, and the nominee consent form. The government fee is zero for paid-up capital up to 15 lakh. After approval, the Registrar of Companies issues a Certificate of Incorporation with your company CIN.

Frequently Asked Questions

8 questions answered by our legal experts

1What is the minimum capital required to start an OPC?

There is no minimum paid-up capital requirement for an OPC. You can start with as little as 1 rupee as authorised capital. Most founders start with 1 lakh authorised capital as convention, but it is not legally required.

2Who should be the nominee of an OPC?

The nominee is a person who takes over the company if the sole member dies or becomes unable to manage the company. The nominee must be an Indian citizen and resident. They must give written consent in Form INC-3. The nominee can be a family member, business partner, or trusted associate and can be changed at any time.

3Can an OPC be converted to a Pvt Ltd company later?

Yes, and it must convert mandatorily if turnover exceeds 2 crore or paid-up capital exceeds 50 lakh. You can also voluntarily convert after 2 years of incorporation by filing Form INC-6 with MCA, increasing directors to minimum 2, and adding at least one more shareholder.

4Does an OPC need to hold board meetings?

Yes, but with relaxed requirements. An OPC must hold at least one board meeting in each half of the calendar year, with a gap of at least 90 days between the two meetings. This is much less onerous than a Pvt Ltd which must hold 4 board meetings per year.

5Can an OPC have employees?

Yes. An OPC can hire any number of employees. The sole member is the owner/director, but the company can have a full workforce. Employees are hired under normal employment contracts and the company must comply with all labour laws (PF, ESI, gratuity, etc.)

6What is the annual compliance requirement for an OPC?

An OPC must file AOC-4 (Financial Statements) and MGT-7A (Annual Return) with MCA every year. Accounts must be audited by a Chartered Accountant. Income tax return ITR-6 must be filed. GST registration and returns apply if turnover crosses the threshold. The compliance burden is less than a Pvt Ltd but more than an LLP.

7Can an OPC raise investment or take loans?

An OPC cannot issue shares to external investors, so it cannot raise equity investment. However, it can take bank loans, MSME credit, and other debt financing. If you plan to raise equity investment from VCs or angels, you must convert to a Pvt Ltd company first.

8What is the government fee for OPC registration?

The government fee for OPC incorporation is nil for authorised capital up to 15 lakh. For capital between 15 lakh and 25 lakh, the fee is 2,000. For capital above 25 lakh, fees are on a slab basis. Professional fees from a consultant typically add 5,000–12,000 to the total cost.

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What is a One Person Company (OPC) and How to Register It in India?