If you’re a solo entrepreneur wondering how to legally start a business without partners, but still want the perks of a registered company, you’ve probably come across the term “One Person Company” or OPC. But what is a One Person Company, really? Is it right for your business?
In this guide, we’ll break down everything you need to know about OPCs in plain language—from what they are, how to register one, to the compliance you’ll need to keep in mind once you’re up and running. Whether you’re a freelancer, a consultant, or a small trader looking to formalize your business, this guide is for you.
What is a One Person Company (OPC)?
A One Person Company (OPC) is exactly what it sounds like—a company that can be started and run by just one person. It’s a business structure introduced by the Companies Act, 2013, which allows a single individual to enjoy the benefits of limited liability and a separate legal identity, much like a Private Limited Company, but without the need for two directors or shareholders.
It’s a great middle-ground between running a sole proprietorship and registering a private limited company.
Features of One Person Company
Here are some of the key features that make an OPC stand out:
- Single Owner: You don’t need a partner. Just one person owns and runs the company.
- Limited Liability: Your personal assets are safe. If your company faces losses, your personal savings aren’t at risk.
- Separate Legal Identity: The company exists separately from you, which adds credibility.
- Nominee Required: You must nominate someone who will take over the company if something happens to you.
- Minimal Compliance: Fewer rules and regulations compared to private limited companies.
Eligibility Criteria for OPC Registration
Before you jump into one person company registration, make sure you check these basic eligibility boxes:
- You must be an Indian citizen and resident of India (stayed in India at least 120 days during the previous year).
- You can only register one OPC in your name.
- You can’t be part of another OPC as a member or nominee.
- The company can’t engage in financial investment or banking activities.
Documents Required for One Person Company Registration
Getting your paperwork in order is half the battle. Here’s what you’ll need:
For the Owner (Director) and Nominee:
- PAN Card
- Aadhaar Card
- Passport-size Photo
- Address Proof (like Bank Statement or Electricity Bill)
For the Registered Office:
- Rent Agreement (if rented)
- NOC from the property owner
- Utility bill (not older than 2 months)
Optional but helpful: Consult someone who offers financial services in Surat to ensure your documents are good to go.
Step-by-Step Process to Register a One Person Company in India
- Get a Digital Signature Certificate (DSC) – This is your electronic signature for online forms.
- Apply for Director Identification Number (DIN) – Required for the director.
- Choose and Reserve a Company Name – Make sure it’s available on the MCA portal.
- Draft MOA and AOA – Memorandum and Articles of Association.
- File SPICe+ Form – This includes company details and uploads all necessary documents.
- Nominee Consent (Form INC-3) – Must be signed by your nominee.
- Certificate of Incorporation – Issued by the Registrar of Companies after verification.
- Apply for PAN, TAN and GST (if applicable) – You can also apply for online GST registration in Surat at this stage.
Benefits of Starting a One Person Company
Why do people choose OPC? Here’s why it makes sense for solo founders:
- Personal Asset Protection: You’re not personally liable for the company’s debts.
- Easy Decision-Making: You’re the only boss—no need for board meetings.
- Credibility: A registered company builds more trust with clients and investors.
- Better Funding Access: Banks and investors prefer working with registered companies.
- Legal Recognition: Having a separate legal identity helps in contracts and taxation.
Drawbacks or Limitations of One Person Company
Of course, it’s not all sunshine. OPCs have some downsides:
- Only One Owner Allowed: No option to add co-founders or investors directly.
- Conversion Requirement: If your turnover crosses Rs. 2 crore or paid-up capital exceeds Rs. 50 lakh, you must convert it to a private limited company.
- Limited Activities: You can’t start an investment or financial business as an OPC.
- Still Some Compliance: Less than Pvt Ltd, yes, but still more than a sole proprietorship.
Compliance Requirements for One Person Company
Once registered, here’s what you’ll need to stay compliant:
- Annual Return Filing (Form MGT-7A)
- Financial Statements (Form AOC-4)
- Income Tax Returns
- Appointment of Auditor within 30 days of incorporation
- Maintain Registers & Records
- Conduct at least one Board Meeting every 6 months
- GST Filing if registered
Missing out on these can lead to penalties, so it’s smart to get help from professionals offering financial services in Surat.
Conversion of OPC into Private Limited Company
When your business grows, you might want to bring in partners or investors. At that point, converting your OPC into a Private Limited Company could be the right move.
When You Must Convert:
- Turnover exceeds Rs. 2 crore
- Paid-up capital exceeds Rs. 50 lakh
Conversion Process:
- Pass board resolutions
- Alter MOA and AOA
- File Form INC-6
- Receive a new Certificate of Incorporation
It’s a bit more paperwork but opens up a lot more opportunities.
Who Should Choose OPC as a Business Structure?
- Freelancers and consultants looking for credibility
- Solo entrepreneurs with future growth plans
- Traders and professionals who want liability protection
If you’re unsure whether OPC is right for you, a consultation with local experts in financial services in Surat can make things clearer.
Conclusion
So, what is One Person Company? In simple terms, it’s the best of both worlds—a registered company with limited liability, yet simple enough for a single owner to manage. If you’re just starting your entrepreneurial journey and want legal protection without the complexity of having partners, OPC might just be your best bet.
Whether it’s getting your paperwork sorted or handling your online GST registration in Surat, it’s always helpful to have a professional by your side. That way, you can focus on what really matters—growing your business.
