One person company (OPC) – Basic Features and Incorporation in India

OPC stands for One Person Company. It’s a very popular form of business around the world where in, only one person is required to register a company.

In India, concept of OPC has been introduced in the companies act, 2013. This act allow to form a company with just one director and one member/shareholder. A single person can be a director and subscriber to the OPC. This means a shareholder can also act in the capacity of a director.

You are required to choose another person as the nominee of the member. You can appoint any individual as a nominee. However, to get appointed as nominee, the individual must be a indian citizen and resident in India, not being a minor.

Before getting into the procedural part of one person company registration, you must understand certain basic requirements of forming a OPC.

Basic Features of One Person Company (OPC)

Here is a list showing all most all the basic features of a OPC:

  • The OPC must have one subscriber/Shareholder holding 100% of the total share. The subscriber can also be appointed as a director of the OPC.
  • Only a natural person being an Indian citizen and resident in India can incorporate a One Person Company. Resident in India means a person who has stayed in India for a period of not less than 182 days during the immediately preceding one calendar year.
  • A minor is not allowed to be a member or nominee of the OPC.
  • A person shall not be eligible to incorporate more than a One Person Company or become nominee in more than one such company.
  • OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of any body-corporate. It can’t be converted to a section 8 company.
  • A OPC can not appoint more than 15 directors.
  • The person forming a one person company has to nominate a nominee. Nominee must be a resident individual and citizen of India.
  • You must include (OPC) within the name of your company. Please note, the word OPC must be within bracket. For instance, you can name it as ABC technology (OPC) Private Limited. Your OPC name must end with words “Private limited”.
  • You can not voluntarily convert into any kind of company unless 2 years have expired from the date of incorporation. However, if the paid up share capital is increased beyond Rs 50 Lakhs and its annual turnover during the relevant period exceeds Rs 2 Crore, you have to compulsorily convert it to a private limited.

The difference between a OPC and proprietorship business is that the liability of the owner. In case of a One Person Company, members liability when business fails is limited, only up to the business assets.

However, in case of a proprietorship business, liability of the proprietor is unlimited. This means, creditors of your business can recover their business liability from home and personal assets such as your cars, residential house, jewellery if business assets are not sufficient to recover their liability.

Procedure to form a one person company or OPC

With effect from 1.2.2017, government has introduced SPICe to simplify company incorporation process. SPICe stands for Simplified Proforma for Incorporation of Company electronically.

Through SPICe, you can also apply for your company PAN and TAN at the same time while submitting documents for company registration. You are not required to apply for your permanent account number separately as it used to be earlier.

Before you start the process of one person company incorporation, you are required to have following things ready:

  • Permanent account number or PAN of the person who is going to be director, nominee or subscriber of the OPC. It’s a must.
  • Passport size photograph of subscriber , nominee and directors
  • Address proof of the subscribers, nominee and directors. Recent bank statement, electricity bill, mobile bill and telephone bill is accepted as address proof.
  • Identity proof of directors, nominee and subscriber. Driving license, passport and voter identity card is accepted as ID proof. You have to provide any one document in addition to PAN card.
  • Consent of the nominee in form INC-3 . You can change your nominee at any time you want after registration.
  • Digital signature certificate or DSC in the name of director and subscriber.

In a one person company, director and subscriber/Shareholder can be the same person. If it’s different in your case, then for each person you have to arrange above documents.

A one person company gets registration with government by following below two steps:

  • Getting name of your OPC approved
  • Filing SPICe form online to get certificate of incorporation

Name approval for one person company name

The first and foremost step in OPC registration process is filing for your desired name approval.

You can apply for the name of your One Person Company by using RUN features at MCA site.

Please remember, you need to comply with the companies act, 2013 for getting your one person company name approved.

Companies act 2013, does not allow certain type of words or in combination of those words as your OPC name. We have written a different article on how to choose your company name. It will guide you to choose the name as per companies act, 2013.

However, we suggest you to consult a practicing chartered accountant, company secretary, cost accountant or a advocate practicing in company incorporation matters to help you in getting more clarity based on your requirements.

Please note, anyhow you need any of these professional help in the last and final step of OPC registration as any one of them have to certify your registration form SPICe before filing with government. So it’s better to consult them after getting everything in order i.e. your desired company name and documents as discussed above.

File SPICe e-form online for registration

Filing SPICe e-form with government is the last step of company registration process. Generally, it takes 3-4 working days to get approval and certificate of incorporation delivered to your email ID.

However, to get it approved, you need to file SPICe form correctly with all the required documents. In case of a error or issues, the process may get delayed.

Don’t worry, government will give you chance for re-submission. If your form still have issues, then it will be rejected and you have to file the SPICe form again.

Following documents are generally attached to the SPICe form and signed by using digital signature certificate of both subscriber/director, as the case may be, and the professional engaged for OPC registration process.

Please note, only a practicing chartered accountant, company secretary, advocate and cost accountant can sign the SPICe form by using their registered DSC. If you are taking help of a third party, then do remember that the form will finally be approved by any one of the above professional by using their registered DSC.

Here are the documents required to be attached with SPICe form before filing with the government:

  • Memorandum of association or MOA in e-form
  • Article of association or AOA in e-form
  • Permanent account number or PAN of all directors, nominee and subscriber.
  • Photos in JPEG format for all directors, nominee and subscriber
  • Address proof of all directors, nominee and subscriber.
  • Directors consent and particulars.
  • Address proof, NOC and utility bill in support of your registered office.
  • Affidavit in INC-9 format

You are not required to have director identification number or DIN at the time of OPC registration.

DIN will be issued automatically after the OPC registration form SPICe is approved by the government. In addition to DIN, you will also get following things:

  • Permanent account number in the name of the OPC.
  • Tax deduction and collection account number or TAN of the OPC.
  • Certificate of incorporation.

The main objective after getting your one person company name approved is to file the SPICe form correctly with all required documents. We suggest you to take help of the professional who is signing the e-form to file it with all the details required for.

is a fellow member of the Institute of Chartered Accountants of India. He lives in Bhubaneswar, India. He writes about personal finance, income tax, goods and services tax (GST), company law and other topics on finance. Follow him on facebook or instagram or twitter.