Home > Income Tax > Help Center > OPC - ExplainedLast Updated: Dec 29th 2023
One Person Company (OPC) - Explained
One Person Company (OPC) is a Company with only one person as a member. That one person will be the shareholder of the company. It avails all the benefits of a private limited company such as separate legal entity, protecting personal assets from business liability, and perpetual succession. An OPC is classified as a private company under Companies Act, 2013.
An alternative to a Private Limited Company (PLC), yet enjoys the benefits of PLC
This document covers
1. Key Features of One Person Company (OPC)
- Has only one person as a member / shareholder.
- Minimum paid up share capital is One Lakh Rupees (Rs. 1,00,000).
- In case of the death of member / shareholder or his incapacity to contract, then nominee / other person become the member of the Company.
- No need to hold any AGM (Annual General Meeting) in each year.
- Very few ROC filings are to be filed with the Registrar of Companies (ROC).
- Easy to Get a Loan from Banks
2. Steps to Register One Person Company (OPC)
While EZTax.in will take care of the entire process in registering a company, below are few steps to understand the process.
- Obtain Digital Signature Certificate [DSC] for the proposed Director(s).
- Obtain Director Identification Number [DIN] for the proposed director(s).
- Select suitable Company Name, and make an application to the Ministry of Corporate Office for availability of name.
- Draft Memorandum of Association and Articles of Association [MOA & AOA].
- Sign and file various documents including MOA & AOA with the Registrar of Companies electronically.
- Payment of Requisite fee to Ministry of Corporate Affairs [MCA]and also Stamp Duty.
- Scrutiny of documents at Registrar of Companies [ROC].
- Receipt of Certificate of Registration/Incorporation from ROC.
3. FAQs
Name reservation: Form INC-1 shall be filed for name availability.
Incorporate OPC: After name approval, form INC-2 shall be filed for incorporation of the OPC within 60 days of filing form INC-1.
Form DIR-12 shall be filed along with (linked) form INC-2 except when promoter is the sole director of the OPC.
The company shall file form INC-22 within 30 days once form INC-2 is registered in case the address of correspondence and registered office address are not same.
The company shall file form INC-4 in case of cessation of member of OPC on account of death, incapacity to contract or change in ownership. In the same form, user needs to provide details of the new member of the OPC.
Before 01/04/2021 : In case the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover of immediately preceding three consecutive financial years exceeds two crore rupees, then the OPC has to mandatorily convert itself into private or public company.
After 01/04/2021: There are no restrictions on the growth of OPC in terms of paid up capital and turnover. The limit of paid up capital of Rs 50 lakhs and turnover of Rs 2 crore was removed w.e.f 01/04/2021
The OPC shall inform RoC in form INC-5, if the threshold limits is exceeded and is required to be converted into private or public company.
Form INC-5 shall be filed within sixty days of exceeding threshold limits.
Before 01/04/2021: Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC. For the above purpose, the term "Resident in India" means a person who has stayed in India for a period of not less than one hundred and eighty two (182) days during the immediately preceding one financial year.
After 01/04/2021: NRI's were not allowed to incorporate OPC's in India previously. Now any natural person, who is an Indian citizen , whether resident or otherwise is allowed to form OPC. For this purpose, the residency period is 120 days instead of 182 days for NRI's
Before 01/04/2021: Earlier, OPC needs to wait for completion of 2 years from the date of incorporation for voluntary conversion to private limited.
After 01/04/2021: Conversion of OPC to private limited is permitted anytime after increasing the directors and members.
