One Person Company (OPC): Registration, Compliance & Conversion Triggers
📌 Quick Answer: What Is an OPC and Who Should Register One?
A One Person Company (OPC) is a company with only one member (shareholder), defined under Section 2(62) of the Companies Act, 2013. It provides the benefits of a separate legal entity and limited liability to a single entrepreneur. An OPC requires a nominee (who becomes the member in case of death or incapacity of the sole member), has no minimum capital requirement, and must mandatorily convert into a private limited company when paid-up capital exceeds Rs 50 lakh or average annual turnover exceeds Rs 2 crore. Registration takes 7–12 working days through the SPICe+ form on the MCA portal. At Virtual Auditor, we handle complete OPC incorporation and ongoing compliance.
📖 Definition — One Person Company (OPC): Under Section 2(62) of the Companies Act, 2013, an OPC means a company which has only one person as a member. It is formed under Section 3(1)(c) and is deemed a private company for all purposes of the Act. The sole member may also serve as the sole director, combining ownership and management in a single individual.
📖 Definition — Nominee (OPC): Under Rule 4(2) of the Companies (Incorporation) Rules, 2014, the subscriber to the memorandum of an OPC must nominate a person (with their prior written consent in Form INC-3) who shall become the member of the OPC in the event of the subscriber’s death or incapacity to contract. The nominee is not a shareholder, partner, or director — they only step into the member’s position upon the triggering event.
Legal Framework: Sections 2(62), 3(1)(c), and 18 of the Companies Act, 2013
Section 2(62) — Definition of OPC
Section 2(62) of the Companies Act, 2013 defines “One Person Company” as a company which has only one person as a member. This concept was new to Indian company law when introduced, designed to encourage sole proprietors and individual entrepreneurs to formalise their businesses with the protection of limited liability and the credibility of a corporate entity.
Section 3(1)(c) — Formation of OPC
Section 3(1)(c) permits one person to form a company for any lawful purpose by subscribing their name to the memorandum and complying with the Act’s requirements. The proviso mandates that such a company can only be formed as a private company. Following the Companies (Amendment) Act, 2021, the residency restriction was significantly relaxed — NRIs (Non-Resident Indians) can now form OPCs in India, whereas earlier, only Indian citizens who were residents could do so.
Section 18 — Conversion of Companies
Section 18 provides for conversion of companies from one class to another. An OPC can voluntarily convert into a private limited company or public company at any time. Additionally, mandatory conversion is triggered when prescribed thresholds of capital or turnover are breached.
Rule 3 and Rule 6 of Companies (Incorporation) Rules, 2014
Rule 3 prescribes the eligibility requirements for forming an OPC, while Rule 6 specifies the mandatory conversion thresholds and the procedure for conversion. These rules were amended by the Companies (Incorporation) Third Amendment Rules, 2021 to align with the 2021 amendments to the Act.
Eligibility and Restrictions
Who Can Form an OPC?
- Indian citizens — whether resident in India or not (post-2021 amendment, NRIs are now eligible to form OPCs).
- Only natural persons (individuals) — a body corporate, HUF, or any artificial juridical person cannot be a member of an OPC.
- A person can be a member in only one OPC at a time and can act as nominee in only one OPC at a time.
- A minor cannot be a member or nominee of an OPC.
Activities Not Permitted for OPC
- An OPC cannot be incorporated or converted into a Section 8 company (non-profit company).
- An OPC cannot carry out Non-Banking Financial Investment activities, including investment in securities of any body corporate.
- An OPC cannot convert into an LLP (since an LLP requires minimum 2 partners under Section 6 of the LLP Act).
OPC Registration Process: Step by Step
Step 1: Obtain Digital Signature Certificate (DSC)
The sole member/proposed director must obtain a Class 3 DSC from a CCA-licensed Certifying Authority. This is required for signing all MCA forms electronically. For a detailed guide, read our article on DSC for Company Registration.
Step 2: Reserve the Company Name
Reserve the company name through RUN (Reserve Unique Name) on the MCA portal or through SPICe+ Part A. The name must end with “(OPC) Private Limited”. Two name choices can be submitted through RUN (only one through SPICe+ Part A). The name must not be identical or too similar to existing companies, LLPs, or trademarks. For naming strategies and common rejection reasons, see our article on Company Name Reservation: RUN Form & Rules.
Step 3: Nominee Consent — Form INC-3
The subscriber must obtain prior written consent from the proposed nominee in Form INC-3. This form must be attached with the SPICe+ application. Requirements for the nominee:
- Must be a natural person (individual).
- Must be an Indian citizen.
- Must have a valid PAN (or passport if NRI/foreign citizen of Indian origin).
- Must not already be a nominee in another OPC.
- Must provide identity proof and address proof.
Step 4: File SPICe+ for Incorporation
The SPICe+ (INC-32) integrated form is used for OPC incorporation, identical to the process for a private limited company. The form includes:
- DIN allotment for the sole director (up to 3 directors can get DIN through SPICe+).
- Company details: Name, registered office address, objects, authorised and paid-up capital.
- Nominee details and Form INC-3 attachment.
- e-MOA (INC-33) and e-AOA (INC-34) — electronically filed Memorandum and Articles of Association.
- AGILE-PRO (INC-35) for simultaneous PAN, TAN, EPFO, ESI, GST registration, and bank account opening.
Step 5: Certificate of Incorporation
Upon approval by the ROC, the Certificate of Incorporation is issued along with the CIN (Corporate Identity Number), PAN, and TAN. The CIN prefix for an OPC includes the NIC code of the business activity, similar to other private companies.
Documents Required
| Document | Required From |
|---|---|
| PAN card | Member + Nominee |
| Aadhaar card | Member + Nominee |
| Address proof (bank statement / utility bill, not older than 2 months) | Member + Nominee |
| Passport-size photograph | Member |
| Nominee consent (Form INC-3) | Nominee |
| Registered office proof (utility bill + NOC / rent agreement) | OPC |
| Passport (if NRI) | Member (apostilled) |
For a complete checklist applicable to all entity types, see our article on Documents for Company Registration 2026.
Mandatory Conversion Thresholds
Under Rule 6 of the Companies (Incorporation) Rules, 2014 (as amended in 2021), an OPC must mandatorily convert into a private limited company or public company if either of the following thresholds is breached:
| Trigger | Threshold | Conversion Deadline |
|---|---|---|
| Paid-up share capital exceeds | Rs 50 lakh | Within 6 months of the date on which the threshold is exceeded |
| Average annual turnover during the relevant period (preceding 3 consecutive financial years) exceeds | Rs 2 crore | Within 6 months of the date on which the threshold is exceeded |
Conversion Procedure
When mandatory conversion is triggered, the OPC must take the following steps within 6 months:
- Induct at least one additional member (to meet the private company requirement of minimum 2 members) and one additional director (to meet the minimum 2 directors requirement).
- Alter the MOA and AOA to remove references to OPC status, nominee provisions, and the “(OPC)” suffix from the name.
- Pass a special resolution (or, since there is only one member, a resolution by the sole member) approving the conversion.
- File Form INC-6 with the ROC along with altered MOA/AOA, consent of new member/director, and the resolution.
- The ROC, after being satisfied, issues a fresh Certificate of Incorporation reflecting the new status as a private limited company.
Voluntary Conversion
An OPC can voluntarily convert into a private limited company at any time, even before breaching the thresholds. This is common when the sole entrepreneur brings in a co-founder, receives investment from an angel investor, or wishes to restructure for growth. The procedure is identical — alter MOA/AOA, add member and director, and file Form INC-6. At Virtual Auditor, we frequently assist solo founders with this transition as they scale their businesses.
🔍 Practitioner Insight — CA V. Viswanathan
In my experience at Virtual Auditor, the OPC is an excellent structure for solo entrepreneurs who want limited liability without the complexity of managing multiple shareholders and directors. However, I always counsel OPC founders on two critical points. First, monitor your turnover and paid-up capital closely — the mandatory conversion thresholds trigger a strict 6-month deadline, and non-compliance attracts penalties under Section 450 (Rs 10,000 plus Rs 1,000 per day of continuing default). Second, choose your nominee carefully and keep Form INC-3 updated — the nominee is not a partner, shareholder, or director in normal circumstances; they only step into the member’s position upon death or incapacity. Many founders nominate family members without explaining the legal implications, which can create confusion during succession. If you plan to raise any external funding, initiate voluntary conversion to a private limited company early — investors universally require the Pvt Ltd structure.
Compliance Requirements for OPC
Exemptions Available to OPC
OPCs enjoy several compliance relaxations under the Companies Act, 2013:
- Board meetings: Minimum only 2 board meetings per year (instead of 4 for a regular Pvt Ltd), with at least 90 days between meetings. If the OPC has only one director, board meeting provisions do not apply — the sole director passes resolutions in writing and records them in the minutes book.
- Annual General Meeting (AGM): OPC is exempt from holding an AGM under the proviso to Section 96(1). The sole member’s decisions are recorded as resolutions without convening a meeting.
- Cash flow statement: OPC is not required to include a cash flow statement in its financial statements (exemption under the proviso to Section 2(40)).
- Rotation of auditor: The mandatory rotation of auditor under Section 139(2) does not apply to OPC.
- Annual return signing: The annual return (MGT-7A) can be signed by the company secretary alone, or if there is no CS, by the sole director.
Mandatory Annual Compliance Calendar
| Compliance | Form | Deadline |
|---|---|---|
| Financial statements filing | AOC-4 | Within 180 days from close of FY (i.e., 27 September) |
| Annual return | MGT-7A | Within 60 days from the date on which AGM should have been held |
| Income tax return | ITR-6 | 31 October (mandatory audit applies to all companies) |
| Director KYC | DIR-3 KYC | 30 September each year |
| Commencement of business declaration | INC-20A | Within 180 days of incorporation (one-time) |
| Statutory audit | — | Mandatory (appoint first auditor within 30 days of incorporation) |
| GST returns (if registered) | GSTR-1, GSTR-3B | Monthly / Quarterly |
| TDS returns | 26Q / 24Q | Quarterly |
For complete post-incorporation compliance guidance, refer to our article on Pvt Ltd vs LLP vs OPC Comparison and our company secretary services.
OPC vs Sole Proprietorship vs Private Limited: Comparison
| Parameter | OPC | Sole Proprietorship | Pvt Ltd |
|---|---|---|---|
| Separate Legal Entity | Yes | No | Yes |
| Liability | Limited to capital | Unlimited (personal assets at risk) | Limited to capital |
| Minimum Members | 1 + 1 nominee | 1 | 2 shareholders + 2 directors |
| Perpetual Succession | Yes (nominee steps in) | No (ceases on death) | Yes |
| Tax Rate | 22% (Section 115BAA option) | Individual slab rates (up to 30%) | 22% (Section 115BAA option) |
| Statutory Audit | Mandatory | Only if turnover exceeds Section 44AB limits | Mandatory |
| Compliance Burden | Moderate | Minimal | Higher |
| Fundraising Capability | Limited (single member until conversion) | Very limited (personal loans only) | Best (equity, preference, debentures, ESOPs) |
| Government Tenders | Eligible (company status) | Limited eligibility | Eligible |
Tax Implications for OPC
Corporate Tax Rate
An OPC, being a company under the Companies Act, is taxed at corporate rates. The applicable options are:
- Section 115BAA: 22% (effective 25.17% with surcharge and cess) — available if the OPC forgoes specified deductions and exemptions.
- Normal rate: 25% for turnover up to Rs 400 crore in FY 2021-22 (effective 26.00% with surcharge and cess); 30% otherwise.
- Section 115BAB: 15% (effective 17.16%) — available for new manufacturing companies incorporated after 1 October 2019 that commence production before 31 March 2024 (extended deadlines may apply).
Dividend Taxation
If the sole member draws profits as dividends, the dividend is taxable in the member’s hands at their applicable income tax slab rate under Section 56(2)(i). TDS at 10% is applicable under Section 194 if dividend exceeds Rs 5,000 in a financial year.
Director’s Remuneration
The sole member, if also appointed as the director or managing director, may draw remuneration subject to Schedule V of the Companies Act (for managing directors) or as per the AOA. The remuneration is deductible as a business expense for the OPC and taxable as salary income in the hands of the director.
Costs and Fees for OPC Registration
| Component | Approximate Cost |
|---|---|
| DSC (Class 3, 2-year validity) | Rs 800–1,500 |
| RUN name reservation | Rs 1,000 |
| SPICe+ government fee (up to Rs 1 lakh authorised capital) | Rs 500 |
| Stamp duty on MOA/AOA | Rs 1,000–15,000 (varies by state) |
| Professional fee (CA-assisted, all-inclusive) | Rs 5,000–10,000 |
For current all-inclusive pricing, visit Virtual Auditor pricing.
Change or Withdrawal of Nominee
The sole member can change the nominee at any time by filing Form INC-4 with the ROC. The process involves:
- Obtaining written consent of the new nominee in Form INC-3.
- Intimating the existing nominee of the change.
- Filing Form INC-4 with the ROC within 30 days of the change, attaching the new Form INC-3.
The nominee may also withdraw their consent at any time by giving notice to the sole member and the OPC. Upon receiving withdrawal of consent, the sole member must nominate a new person within 15 days and file Form INC-4 with the ROC.
Why Choose Virtual Auditor for OPC Registration
At Virtual Auditor, our OPC registration service is managed by CA V. Viswanathan (FCA, ACS, CFE, IBBI/RV/03/2019/12333) and our team of qualified CAs and company secretaries. We provide:
- End-to-end incorporation: DSC procurement, name reservation, SPICe+ filing, MOA/AOA drafting, nominee consent management, and all statutory registrations.
- Capital planning advisory: We advise on optimal authorised and paid-up capital to avoid triggering premature mandatory conversion.
- Conversion assistance: Seamless voluntary conversion from OPC to Pvt Ltd when you bring in a co-founder or investor.
- Ongoing compliance: Annual return filing, financial statement filing, statutory audit coordination, and company secretary services.
- Startup advisory: DPIIT recognition, startup valuation, and investor-readiness preparation for when you are ready to scale beyond the OPC structure.
📋 Key Takeaways
- OPC allows a single person to form a company with limited liability and separate legal entity status under Section 2(62).
- Nominee is mandatory — consent must be obtained in Form INC-3 and filed with SPICe+.
- Mandatory conversion triggers: Paid-up capital exceeds Rs 50 lakh OR average annual turnover exceeds Rs 2 crore — conversion must happen within 6 months.
- NRIs can now form OPCs following the Companies (Amendment) Act, 2021.
- Compliance is lighter than regular Pvt Ltd: Only 2 board meetings per year, no AGM, no cash flow statement required.
- Statutory audit is mandatory for all OPCs regardless of turnover — unlike LLPs which have exemptions.
- Corporate tax rate of 22% under Section 115BAA is available, same as for private limited companies.
Frequently Asked Questions
Can an NRI form a One Person Company in India?
Yes, after the Companies (Amendment) Act, 2021, NRIs (Non-Resident Indians) are eligible to form OPCs in India. The earlier restriction that required the sole member to be an Indian citizen residing in India has been removed. However, all MCA filings, statutory compliance, and registered office must be in India. The nominee must also be an Indian citizen.
What happens if the sole member of an OPC dies?
In the event of death of the sole member, the nominee named in Form INC-3 becomes the member of the OPC by operation of law. The nominee must intimate the ROC within 15 days of becoming the member by filing Form INC-4. The transmission of the sole share to the nominee occurs under the company’s articles. The nominee then has the option to continue the OPC, nominate a new nominee, or convert it into a private limited company.
Can an OPC have more than one director?
Yes. While an OPC can have only one member (shareholder), it can appoint up to 15 directors on its board (or more with special resolution under Section 149(1)). There is no restriction on the number of directors. The sole member typically serves as a director as well, but additional directors can be appointed for operational and management needs.
Is the nominee a shareholder or director in the OPC?
No. The nominee is neither a shareholder nor a director during the lifetime and capacity of the sole member. The nominee only steps into the role of the sole member upon the death or incapacity of the original member. Until that event, the nominee has no rights, powers, or obligations in the OPC. It is purely a succession mechanism to ensure perpetual succession of the company.
What is the penalty for not converting OPC when thresholds are breached?
If an OPC fails to convert within 6 months of breaching the paid-up capital threshold of Rs 50 lakh or the average annual turnover threshold of Rs 2 crore, penalties apply under Section 450 of the Companies Act, 2013 — Rs 10,000 for the company and a further Rs 1,000 for every day during which the contravention continues, subject to a maximum of Rs 2 lakh for the company and Rs 5 lakh for every officer in default.
Can an OPC raise investment from angel investors or venture capital?
Technically, an OPC can issue additional shares, but since it can have only one member, the new investor would need to become the sole member (displacing the founder) or the OPC must first convert into a private limited company. In practice, all institutional investors (angels, VCs, PEs) require a Pvt Ltd structure. We recommend initiating voluntary conversion to Pvt Ltd before engaging with investors.
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