A One Person Company (OPC) is a form of business entity that allows a single entrepreneur to operate a company with limited liability protection. It was introduced in the Companies Act, 2013 to encourage sole proprietors to form companies.
Key Features
- Single Member: Only one shareholder who is also the director
- Limited Liability: Member's liability limited to share value
- Nominee Required: Must nominate a person who becomes member on death/incapacity
- Perpetual Succession: Continues through nominee
- Simplified Compliance: Fewer meetings and filing requirements
Eligibility (Post 2021 Amendment)
| Criteria | Requirement |
|---|---|
| Citizenship | Indian citizen OR Indian resident (NRIs eligible) |
| Residency | 120+ days in India (if resident) |
| Other OPC | Cannot be member/nominee in another OPC |
| Minor | Cannot be member or nominee |
| Paid-up Capital | No limit (earlier Rs. 50 lakhs) |
| Turnover | No limit (earlier Rs. 2 crores) |
OPC vs Sole Proprietorship
| Aspect | OPC | Sole Proprietorship |
|---|---|---|
| Legal Entity | Separate entity | Same as owner |
| Liability | Limited | Unlimited |
| Compliance | Company law compliance | Minimal |
| Credibility | Higher | Lower |
| Succession | Through nominee | No continuity |
| Tax Rate | 25% corporate rate | Individual slab rates |
Conversion
OPC can be converted to Private Limited Company voluntarily or mandatorily if:
- Paid-up capital exceeds Rs. 50 lakhs, OR
- Turnover exceeds Rs. 2 crores for 3 consecutive years
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