How to Set Up a One Person Company (OPC) in India

Kaustav Chowdhury
Jun 26
4 min read

Updated: Jul 5

A One Person Company (OPC) is a form of company introduced by the Companies Act, 2013 that allows a single individual to operate a corporate entity with limited liability. It combines the benefits of a sole proprietorship (single ownership, ease of decision-making) with the advantages of a private limited company (limited liability, separate legal entity, perpetual succession). This guide explains the eligibility criteria, incorporation procedure, compliance requirements, and conversion rules for OPCs in India.

What Is an OPC and Who Can Form One

Under Section 2(62) of the Companies Act, 2013, a One Person Company means a company which has only one person as a member. Section 3(1)(c) permits a single person to form a company for any lawful purpose. The key eligibility requirements are as follows. Only a natural person who is an Indian citizen can be a member and nominee of an OPC. Following the 2021 reforms implemented through the Companies (Incorporation) Second Amendment Rules, 2021 -- which is subordinate legislation (rules) under the Companies Act, 2013, not an Amendment Act -- the residency requirement was relaxed: the member need not be a resident in India, but must be an Indian citizen. These rules also enabled NRI ownership of OPCs. A person can be a member of only one OPC at a time, and a minor cannot be a member or nominee.

The Companies (Incorporation) Second Amendment Rules, 2021 also removed the earlier threshold limits that required mandatory conversion of an OPC into a private limited company if paid-up capital exceeded Rs 50 lakh or annual turnover exceeded Rs 2 crore. There is now no turnover or capital ceiling for OPCs, making this structure significantly more attractive for entrepreneurs and small business owners.

Step 1: Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN)

The sole member (who will also typically be the first director) must obtain a Class 3 Digital Signature Certificate (DSC) from a Certifying Authority recognised by the Controller of Certifying Authorities. The DSC is required for electronically signing all MCA filings. Additionally, a Director Identification Number (DIN) must be obtained. Under the current SPICe+ process, the DIN is allotted as part of the incorporation application itself, so a separate DIN application is not required. (Related: How to File Annual Returns for a Company Under the Companies Act 2013)

Step 2: Reserve the Company Name

The company name must end with "(OPC) Private Limited". Name reservation can be done through Part A of SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) on the MCA21 portal. The applicant can propose up to two names in order of preference. The name must comply with the naming guidelines under Rule 8 of the Companies (Incorporation) Rules, 2014: it should not be identical or too similar to an existing company or trademark, should not contain prohibited words (such as "President", "Governor", or names of international organisations), and should not be offensive. Name approval typically takes one to three days.

Step 3: File SPICe+ (Part B) for Incorporation

After name approval, file SPICe+ Part B with the following details and attachments: the Memorandum of Association (MoA) in Form INC-33, containing the objects of the company; the Articles of Association (AoA) in Form INC-34, containing the rules for internal governance; consent of the nominee in Form INC-3; proof of registered office address (rental agreement or ownership document, NOC from the property owner, and a utility bill not older than two months); identity and address proof of the member and nominee (PAN card, Aadhaar card, passport); and a declaration by a professional (practising Chartered Accountant, Company Secretary, or Cost Accountant) in Form INC-9.

Step 4: Obtain Certificate of Incorporation

The RoC reviews the application, and if satisfied, issues the Certificate of Incorporation (CoI) along with the PAN and TAN of the company. The SPICe+ process also integrates GSTIN application, EPFO registration, ESIC registration, and bank account opening. This means that upon successful incorporation, the OPC receives its CIN (Corporate Identity Number), PAN, TAN, and GSTIN in a single integrated process. The typical timeline from SPICe+ filing to CoI issuance is three to seven working days. (See: How to Apply for MSME Udyam Registration)

The Nominee Requirement

One unique feature of an OPC is the mandatory requirement to nominate a person who will become the member of the company in the event of the sole member's death or incapacity to contract. The nominee must give written consent in Form INC-3, which is filed with the RoC at the time of incorporation. The member may change the nominee at any time by filing Form INC-4. The nominee must also be an Indian citizen. This mechanism ensures the perpetual succession of the company, one of the key advantages of the OPC structure over a sole proprietorship.

Compliance Requirements for OPCs

OPCs enjoy several compliance relaxations compared to private limited companies. An OPC is not required to hold an annual general meeting under Section 96 of the Companies Act. However, it must file annual returns (Form MGT-7A, a simplified version), financial statements (Form AOC-4), and maintain statutory registers. An OPC must appoint an auditor within 30 days of incorporation. If the OPC's turnover exceeds Rs 50 lakh or paid-up capital exceeds Rs 25 lakh, it must appoint a Company Secretary. Income tax returns must be filed annually, and GST returns must be filed if the OPC is registered under GST. (See also: Director Disqualification Under Section 164: How It Works)

Conversion of OPC to Private Limited Company

An OPC can voluntarily convert into a private limited company by passing a special resolution (or written consent of the sole member) and filing Form INC-6 with the RoC. The conversion process involves increasing the number of members to at least two and directors to at least two, amending the MoA and AoA, and filing the prescribed forms. The minimum paid-up capital requirement for conversion does not apply after the 2021 amendments. Conversion typically takes 30 to 60 days from the date of filing. (Related: How to Register a Private Limited Company in India)