One Person Company (OPC)

One Person Company is a new form of business entity. The directors and shareholders can be same individuals. One person company does away with the requirement of minimum two shareholders. It allows a single entrepreneur to get his business registered as a company and get limited liability protection.

Mandatory compliance for an OPC:

The basic mandatory compliance are:

  • Maintenance of proper books of accounts
  • Statutory audit of Financial Statements
  • Filing of business Income tax return every year before 30th Sep
  • Filing Annual ROC return which includes form MGT-7 – Statement of Disclosure of Share Holders and Directors

Eligibility criteria for a member of OPC:

​A natural person who is resident in India and Indian Citizen who is living in India for a period of 182 Days is eligible to act as a member and nominee of an OPC. ​A person can be only being member of one OPC. ​If a person becomes member or nominee of 2 or more than 2 OPC’s then he has to withdraw his membership from the OPC within 182 days.

Persons who are not eligible to form one person company:

A minor shall not eligible becoming a member

  • foreign citizen
  • Non Resident
  • Any person incapacitated by contract

Advantages of an OPC includes:

  • Compliance burden
  • Perpetual Succession
  • Simple to Get Loan from Banks
  • Annual return filing
  • No prerequisite to holding annual or Extra-ordinary General Meetings
  • Board Meeting

Disadvantages of an OPC includes:

  • High Tax Rate
  • Consistency Cost
  • OPC is included in Name
  • One Person Management
  • OPC Incorporation is allowed
  • Not suitable for high turnover

Process to create a one person Company:

  1. Apply for DSC
  2. Apply for DIN
  3. Name Approval Application
  4. Documents Required
  5. Filing Forms with MCA
  6. Issue of certificate of Incorporation

Check List for an OPC:

  1. One director and nominee name
  2. Capital Description
  3. Name for OPC
  4. Pan –self attested of both director and nominee
  5. Address Proof (either passport , voter ID , Aadhar card, bank statement or copy of utility bill not older than two months) Self attested
  6. E-Mail ID’s and mobile number
  7. One Photograph of both
  8. Address proof of Business