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The Companies Act of 2013 included a number of previously unheard-of notions that fundamentally changed company regulations in India The introduction of the One Person Company concept was one of the key decision by government. This resulted in the discovery of a brand-new method of launching enterprises that offered the flexibility that a company form of entity may provide, along with the limited liability protection that partnerships or sole proprietorships did not.
According to Section 2(62) of the Companies Act, a OPC is a one person company having just one member. Moreover, a company’s members are merely stockholders or subscribers to its memorandum of organization. Accordingly, an OPC is essentially a business with a single stakeholder.
These kinds of businesses are typically founded by a single founder or promoter. Due to the many benefits that OPCs provide, entrepreneurs with fledgling companies would rather establish them than operate as sole proprietorships.
The distinction between sole proprietorships and OPCs
Because they both have one individual owning the business, sole proprietorships and one-person companies may appear to be quite similar, but there are several key distinctions between the two.
The nature of their respective responsibilities is the primary distinction between the two. An OPC has its own assets and liabilities since it is a distinct legal entity from its promoter. The promoter is not held personally responsible for paying off the company’s debts. However, sole proprietorships and their owners are the same individuals. Therefore, in the event that the business’s liabilities are not fulfilled, the law permits the attachment and sale of the promoter’s personal assets.
The member grants a distinct legal entity status to the OPC. The OPC is a distinct legal body that provides protection to the only person who incorporated it. The member is not held personally responsible for the company’s failure; instead, their culpability is restricted to their shares. Therefore, rather than the member or director, the OPC may be sued by the creditors.
Being a private company, OPC can easily raise money from venture capitalists, angel investors, incubators, and other sources. Instead of lending money to a sole proprietorship, banks and other financial institutions prefer to lend money to businesses. This makes it easier to get money.
Regarding compliance, the Companies Act of 2013 grants the OPC some concessions. The OPC does not require to prepare cash flow statement. The director is the only person who needs to sign the yearly returns and books of accounts, not the company secretary.
Since OPC only needs one member and one candidate to be incorporated, it is simple to do so. The member may also serve as the director. There is no minimum paid-up capital requirement, but OPC incorporation requires a minimum authorized capital of Rs. 1 lakh. As a result, it is simpler to incorporate than other company structures.
The process of making decisions is quick and simple. The member can simply pass both regular and special resolutions by signing them and recording them in the minute book. Because there won’t be any internal conflicts or delays, operating and managing the business will be simple
Even in cases where there is only one member, the OPC has the feature of everlasting succession. The single-member must designate a nominee while incorporating the OPC. The nominee will manage the business in the member’s stead after their passing.
OPC is appropriate for small business setups. The OPC is only ever allowed to have one member at a time. OPC is forbidden from raising additional funds by adding more members or shareholders. Therefore, it is not possible to add new members as the business grows and expands.
The OPC is prohibited from engaging in non-banking financial investment operations, such as purchasing securities from corporations. It cannot be changed to become a business with the charitable purposes specified in Section 8 of the 2013 Companies Act.
There will not be a clear separation between ownership and management because the solitary member may also serve as the company’s director. All decisions may be made and approved by the lone member. It is difficult to distinguish between ownership and control, which could lead to unethical commercial actions.
In the SPICe+ form, provide the proposed director’s name and proof of address in addition to their Director Identification Number (DIN). Only established businesses have the option to use Form DIR-3. This indicates that the applicant will no longer need to submit Form DIR-3 individually as of January 2018. DIN is now available for up to three directors on the SPICe+ form.
Selecting the company’s name is the next stage in the incorporation of an OPC. The business will go by the name “ABC (OPC) Private Limited.” In the Form SPICe+ application, the name may be accepted. The Form SPICe+ application can only include one preferred name and the reasons for preserving it. Another name can be submitted by submitting a new Form SPICe+ application if the first one is denied. We proceed to the following phase after the MCA approves the name.
Together with the Director’s and professional’s DSC, all the documents will be linked to the SPICe+ Form, SPICe-MOA, and SPICe-AOA before being uploaded to the MCA website for approval. When the company is incorporated, the Pan Number and TAN are automatically produced. PAN and TAN can be obtained without submitting separate applications.
We can start our company after the Registrar of Companies (ROC) issues a Certificate of Incorporation following verification.
In order to submit the following documents to the ROC, we must prepare them:
A company with just one stakeholder is known as a One Person Company (OPC). It was created in accordance with the Companies Act of 2013 to give those who seek to operate a limited liability company without involving several shareholders a more straightforward business structure.
An OPC can only be formed by a natural person who is a citizen of India and resides in India. Furthermore, each individual can only create one OPC at a time.
Since it’s a one-person company, the minimum number of members is one. The maximum number of members is one, however in the event of the lone member’s incapacity or death, a nominee must be in place to take over.
When the OPC is incorporated, the sole member appoints the nominee, who must also be an Indian citizen and a resident of India. In the event of the original member’s death or disability, the candidate will take over as the only member.
The member’s responsibility is capped to the capital they have contributed to the business. It indicates that aside from their investment in the business, only one member’s personal assets are safe.
No, an OPC can have only one director at the moment of incorporation. Nonetheless, a minimum of one director is required, and a maximum of 15 directors may be present.
No, annual general meetings (AGMs) are not held by OPCs. Resolutions may be passed by the lone member by putting them in writing.
i) OPCs must nevertheless submit their annual financial statements to the Registrar of Companies (RoC) even though they are exempt from some compliance requirements.
ii) Select an auditor.
iii) Keep the required books and registrations up to date.
iii) Submit to the Ministry of Corporate Affairs’ (MCA) yearly return.
The Companies Act of 2013 does not specify a minimum capital requirement. Nonetheless, the lone member must determine the company’s nominal share capital.
No, an OPC is not permitted to raise money from the general public or offer shares to the general public. It is a privately held business with little funding.
The nominee chosen at the time of incorporation assumes the role of the only member in the event that the OPC’s sole member passes away. In the absence of a nominee, the OPC will be regarded as a regular business and subject to the standard rules set forth in the Companies Act.
OPCs pay private limited company taxes. They must pay corporation tax rates that are determined by their income and other laws that apply to businesses. If an OPC’s yearly turnover surpasses the threshold, they also have to pay the Goods and Services Tax (GST).
i) Liability: In a sole proprietorship, the owner’s liability is unlimited, while in an OPC, it is restricted to the company’s capital.
ii) Regulation: While sole proprietorships are subject to different rules depending on the nature of their business, OPCs are governed by the Companies Act of 2013.
iii) Legal Entity: A sole proprietorship is not regarded as a distinct legal entity from its owner, although an OPC is.
No, according to the Companies Act of 2013, only Indian citizens and residents are permitted to form an OPC. Members or nominees of an OPC cannot be foreign nationals.
i) The member’s liability is capped at the amount of their capital contribution.
ii) Separate Legal Entity: The OPC and its members are two different legal entities.
iii) Less Compliance: In contrast to both private and public enterprises, OPCs are subject to fewer compliance standards.
iv) Sole Control: The member is in total command of the company.
One Person Company Registration is your gateway to solo entrepreneurship with legal strength and credibility.
Whether you’re a freelancer, consultant, or a solo founder, registering as a One Person Company helps you:
✅ Start your business with a recognized legal structure
✅ Enjoy limited liability and protect personal assets
✅ Maintain full control with single ownership
✅ Build trust with banks, clients, and vendors
✅ Comply with the Companies Act and ease future expansion
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