Step 3 F:-One Person Company


What Is A One Person Company?

A company formed and regulated by a single person. In this form of company, only one man holds virtually the whole share capital of the company or with a few extra members holding the remaining, who are generally the relatives or nominees of the proprietor. Since this person holds control over the largest part of the company he is the managing director who enjoys the control of the company. The Proprietor of such company is in a position of enjoying the profits of the business with limited liability.


Although the exact rules are not clear, the following rules have been proposed in the new company bill,2013:-

  • Firstly, the person is to give a separate name and legal identity to the Company, under which all the activities of the business are to be carried on. This ensures that a separate legal entity is formed.
  • Secondly, the person has to nominate a name with that person’s written consent as a nominee to the OPC. This person will be the default and ad hoc member in case of the existing sole member’s death or disability. This provision will ensure perpetuity and continuity to the life of the Company. The golden rule of “members may come and go, but the Company must live on” holds good.
  •  Finally, every One Person Company should bear the letters “OPC” in brackets after it’s a registered name, wherever it may be printed, affixed or engraved.


The following are the important features of the One Person Company (OPC)

  • One Person Company is one of the types of Company on the basis of the number of members
  • One Person Company has only one person as a member/shareholder.
  • One Person Company is a Private Company
  • Minimum paid up share capital of One Person Company is one lakh rupees (Rs. 1,00,000)
  • One Person Company may be either a Company limited by share / a Company limited by guarantee / an unlimited Company
  • The words “One Person Company” should be mentioned in brackets below the name of the One Person Company
  • One Person Company shall indicate the name of the nominee/another person in the memorandum, with his prior written consent
  • The written consent above shall be filed with the Registrar at the time of incorporation of the One Person
  • The company along with its M&A (Memorandum and Articles)
  • The nominee/other people can withdraw his consent at any time
  • The member/Shareholder of One Person Company may change the nominee/other people at any time, by giving notice to the other person and intimate the same to Company. Then the Company should intimate the same to the Registrar
  • In case of the death of member/shareholder or his incapacity to contract, then-nominee/other person become a member of the Company
  • Member/Shareholder of the One Person Company acts as the first director until the Company appoints a director(s)
  • One Person Company can appoint a maximum of 15 directors, but the minimum should be one director
  • One Person Company need not hold any AGM (Annual General Meeting) in each year
  • Cash Flow Statement may not include in the financial statements of One Person Company
  • One Director is sufficient to sign the Financial Statements/Director’s Report
  • Within 180 days from the closure of the Financial Year, One Person Company should file the copy of the Financial Statements with Registrar
  • One Person Company should inform the Registrar about every contract entered and also should record in the minutes of the meeting within 15days from the date of approval by the BOD (Board of Directors).

Is Concept Of One Person Company Identical To Sole Proprietorship?

No, it’s not the same concept and the differences are as follows:

One Person Company Sole Proprietorship
The owner and the business are considered as different legal personalities. The owner and the business are considered to be different from each other.
The liability is limited. The liability is unlimited.
Debts are not the sole responsibility of the owner. Debts are the sole responsibility of the owner of the business
Financial position depends upon the credit record of the company and not the owner The financial position is judged upon the record of the owner and not the company
Tax is paid in the capacity of the company. Tax is paid by the owner.

Limited Liability as a privilege:

Under the concept of one person company, you enjoy all the right of a sole proprietor and also have the benefit of limited liability.
If you are also excited about this brand new term and want to understand how you can form an OPC for your new startup