One Person company- Meaning,Features,Benefits, Registration process

Last Updated On: July 22, 2020, 1:41 p.m.


Section 2(62) of Companies Act defines One person Company as a company that has only one person has its member. Furthermore, members of the company are nothing but subscribers to its memorandum of association or shareholders. So, One Person Company (OPC) is effectively a company that has only one shareholder as its member.

One Person Company generally is created when there is only one founder/promoter for the business. Entrepreneurs whose business lies in the early stages prefer to create OPCs instead of sole proprietorship business because of the several advantages that OPCs offer.


Features of One Person Company:

  • Section 3(1)(c) of the Companies Act says that a single person can form a company for any lawful purpose. It further describes OPCs as private companies.
  • OPCs can have only one member or shareholder, unlike other private companies.
  • A unique feature of OPCs that separates it from other kinds of companies is that the sole member of the company has to mention a nominee while registering the company
  • Since there is only one member in an OPC, his death will result in the nominee choosing or rejecting to become its sole member. This does not happen in other companies as they follow the concept of perpetual succession.
  • OPCs need to have a minimum one person (the member) as director. They can have a maximum of 15 directors.
  • Companies Act, 2013 has not prescribed any amount as minimum paid-up capital for OPCs.
  • OPCs enjoy several privileges and exemptions under the Companies Act that other kinds of companies do not possess.



  • The main advantage of the one-person company is it provides limited liability to its members.
  • One person Company has less compliances when compared to a private limited company
  • Perpetual Status.
  • The member can exit easily by transferring his/her share.



A single person can form One person company by subscribing his name to the memorandum of association and fulfilling other requirements prescribed by the Companies Act,2013.

Such Memorandum should contain the name of the nominee who shall become the sole member in case if the original member dies or becomes incapable of entering into contractual relations.

The memorandum and the nominee’s consent should be filed to the Registrar of Companies along with an application of registration.

Such a nominee can withdraw his name at any point in time by submission of requisite applications to the Registrar. His nomination can also later be canceled by the member.


Who cannot form an OPC?

No artificial person like company, LLP, Partnership firm, etc.. can form One Person Company.



Only natural persons who are residents of India/Indian citizens are eligible to form OPC. The Nominees should also be a resident of India.

It is important to note that only natural persons can become members of OPCs. This does not happen in the case of companies wherein companies themselves can own shares and be members. Further, the law prohibits minors from being members or nominees of OPCs.



COMPULSORY CONVERSION: if the paid-up share capital or average annual turnover exceeds the limit (in case of paid-up capital limit should not exceed more than Rs.50 lakh and in case of annual turnover should not exceed Rs.200 Lakh for last 3 consecutive year), then the one-person company compulsorily required to be converted in a private limited company having more than one member.

VOLUNTARY CONVERSION: if such person company want to be converted into the private limited company having more than one member then such company can be converted through application to MCA as per prescribed procedure at any time but at least after 2 years of incorporation



Digital Signature certificate: For the application of DSC, an individual should have Address proof, Aadhar Card, Pan Card, Photo, Email Address, mobile number.

2. Director identification number: Any individual can apply DIN along with required documents to MCA.

3. Name Approval

4. Memorandum of Association and Articles of Association: it describes the object, structure, capital introduced, etc.

5. KYC documents

6. Ownership proof of Registered office: Like Rent agreement along with NOC from the owner, if it is owned by the same individual then electricity bill etc.

After application as per prescribed forms to MCA, MCA issues a certificate of Incorporation after verifying all the documents.


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