What is an OPC?
An OPC (One Person Company) is company that can be started and run by single person. It’s type of private limited company but with just one director and one shareholder. This business model is ideal for solo entrepreneurs who want benefits of corporate structure without needing business partner.
Why was OPC introduced in India?
concept of OPC Registration was introduced under Companies Act, 2013 to support entrepreneurs who operate alone but want formal business structure. It allows individuals to enjoy limited liability, legal identity, and easier funding opportunities.
Advantages of OPC
Limited Liability Protection
biggest perk? Your personal assets stay safe. If business runs into debt, only assets of OPC are used to pay liabilities.
Separate Legal Entity
Even though you’re only one running show, your OPC has its own identity. This means you can sue or be sued in name of company.
Easy to Raise Funds
Banks and investors often prefer companies over sole proprietorships. With an OPC Registration, it becomes easier to raise funds and secure loans.
Single Ownership Simplicity
One person controls everything—no board meetings, no shareholder disagreements. It’s business made simple!
Eligibility Criteria for OPC Registration
Who Can Register an OPC?
Only natural person who is an Indian citizen and resident of India can register an OPC.
Minimum and Maximum Requirements
- Only one person as director and shareholder.
- nominee must be appointed.
- An OPC cannot have turnover more than ₹2 crore and paid up capital over ₹50 lakh. If it exceeds, conversion is required.
Documents Required for OPC Registration
Personal Documents
- PAN Card and Aadhar Card of director
- Passport size photograph
- Address proof (Bank Statement, Electricity Bill)
Business Address Proof
- Rent Agreement or Sale Deed
- NOC from property owner
- Utility bill (not older than 2 months)
Other Supporting Documents
- Director’s consent (Form INC 9)
- Declaration for compliance
Step by Step OPC Registration Process
Step 1: Obtain DSC (Digital Signature Certificate)
Every director must have DSC to sign electronic documents. You can apply for it online through certifying agencies.
Step 2: Get DIN (Director Identification Number)
DIN is required to identify director. It’s allotted by MCA during SPICe+ form filing process.
Step 3: Name Approval via RUN
Use RUN (Reserve Unique Name) service on MCA portal to get your desired company name approved.
Step 4: File SPICe+ Form
This form includes all incorporation details like MOA, AOA, PAN, TAN, and more.
Step 5: Certificate of Incorporation
Once documents are verified and approved, Registrar issues Certificate of Incorporation. Congrats, you’re now officially company!
Fees and Time Involved
Government Fees
Government fees vary based on authorized capital. For capital under ₹10 lakh, fee is nominal.
Professional Fees
Hiring CA or CS can cost anywhere between ₹5,000 to ₹15,000 depending on complexity.
Time Frame for Registration
Usually, registration process takes 7–10 working days.
Post Registration Compliance
Appointment of Auditor
Within 30 days of incorporation, you must appoint Chartered Accountant as statutory auditor.
Annual Filing Requirements
- Filing of AOC 4 (Financial Statements)
- Filing of MGT 7A (Annual Return)
Statutory Registers and Minutes
Even an OPC must maintain proper books, registers, and board meeting records (even if you’re only board member!).
OPC vs Sole Proprietorship
Legal Identity
OPC has separate legal identity, sole proprietorship doesn’t.
Tax Benefits
OPC is taxed as per corporate tax rates which may offer better structuring for deductions.
Liability Protection
You are personally liable in sole proprietorship, but not in an OPC.
OPC vs Private Limited Company
Ownership
OPC is single owner, whereas private limited needs at least two shareholders and two directors.
Compliance Burden
OPC has lesser compliance as compared to full fledged private limited company.
Scalability
Private limited is better for larger growth plans. OPC is great for small, manageable businesses.
When Should You Choose OPC?
For Freelancers and Solopreneurs
If you’re consultant, designer, coach, and freelancer who wants registered company—OPC is ideal.
For Startups with Single Owner
If you plan to expand slowly and keep control centralized—start with an OPC.
Limitations of OPC
Restriction on Business Expansion
OPC structure restricts growth beyond certain financial limit.
Taxation as per Corporate Rate
You’ll be taxed like any other company, even though you may not earn as much.
Mandatory Conversion Rules
Once turnover crosses ₹2 crore or capital crosses ₹50 lakh, you must convert OPC into private/public limited company.
Mandatory Conversion of OPC
When is Conversion Compulsory?
Conversion becomes mandatory if:
- Paid up capital exceeds ₹50 lakh
- Average turnover of past 3 years exceeds ₹2 crore
How to Convert into Private/Public Company
- Pass board resolution
- File INC 6 form
- Draft and file altered MOA & AOA
- Get ROC approval
Common Mistakes During OPC Registration
Choosing Invalid Name
Your company name should comply with MCA naming guidelines. Avoid using restricted or trademarked names.
Improper Documentation
Missing or incorrect documents can delay registration.
Ignoring Compliance Requirements
Many new founders forget post registration duties like auditor appointment, GST, and annual filings.
Expert Tips for Smooth Registration
Consult Professionals
Hire good CA or company secretary to guide you through legal maze.
Keep All Documents Ready
Half of delay happens because documents aren’t prepared in advance.
Use Online Platforms Wisely
Platforms like Kanakkupillai, LegalWiz, and VakilSearch can make process faster and smoother.
Conclusion
Starting an OPC in India is one of smartest moves for solo entrepreneurs. It gives you legal shield of company without forcing you to find partner. With limited liability, separate legal identity, and minimal compliance, OPC is ideal for anyone wanting to start small and grow big—on their own terms.
FAQs
Q1: Is OPC suitable for startups?
Yes, especially if you’re starting alone and don’t have co founders. It’s perfect for testing your business idea legally and securely.
Q2: Can OPC have employees?
Absolutely. There’s no restriction on number of employees an OPC can hire.
Q3: Is GST mandatory for OPC?
Only if your annual turnover exceeds ₹20 lakh (₹10 lakh for NE states) or you’re into interstate supply.
Q4: Can foreign nationals start OPC in India?
No, only Indian residents can register an OPC. However, foreigners can invest in private limited company.
Q5: What is tax rate for OPC?
Flat 25% for turnover up to ₹400 crore, plus applicable surcharge and cess.
