What is a One Person Company? / What is a One Person Company registration?

The concept of One Person Company was introduced in India by the ministry with a viewpoint that there are people who want to avail the benefits of a company but at the same time want to retain the status of a proprietor. OPC is basically an amalgamation of a private limited company and a proprietorship. By now you have a clear image of what an OPC is, i.e. it is a type of a company where a single person can start business with limited liability.

What are key features?

Key features of OPC includes:

Single Member-
In an OPC, a single person can act as both the director and shareholder of the company.

Limited liability-
Earlier before the concept of OPC was introduced in India, people who wanted to do business as a single person had to form a proprietorship firm. Here the liability of business did not end with the assets of the business only, but it extended to the proprietor that is the owner’s assets also. This is known as unlimited liability. Now with the introduction of OPC, a single person can now start a business with a limited liability where the liability of the business can not extend to the owner making the owner risk free of losing personal assets.

Separate Legal Entity-
An OPC and the owner are two separate legal entities. The OPC can own assets, have liabilities, enter into contracts, can sue and be sued in its own name without affecting the owner.

Nominee Director-
At the time of formation of an OPC, the member has to nominate a person as nominee director who will become director, that is to take over the business in the event of the original director/member becoming incapacitated or passes away.

Statutory compliances-
An OPC must comply with the statutory compliances laid down by the ministry of corporate affairs such as filing annual returns, maintaining records, keeping financial statements up-to-date, etc.

Perpetual succession-
An OPC has a perpetual succession which means that whether the member dies or becomes incapacitated, the company always continues to exist. The nominee director takes over the company after the death of the member/original owner of the OPC.

No minimum capital requirement-
There are rules as to what should be the minimum capital required to start an OPC as compared to a private limited company. A person can start a business as an OPC with any amount of initial capital.

Overall the OPC is a great option for the individuals who want to start business without any partners and want to have a limited liability. It is becoming a popular option for small businesses, consultants and professionals who operates as sole proprietors or unregistered entities.

Benefits of Registering One Person Company

Eligibility Criteria for Registering One Person Company

Documents Required for One Person Company Registration

Procedure for Registering One Person Company

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