What is a One Person Company (OPC)?

By the India Law Simplified editorial team · Verified against the bare Acts & official portals · Updated 2026-08-18 · ~8 min read

⚡ Quick answer

A One Person Company (OPC) is a company that can be owned by a single person. It was introduced under the Companies Act 2013 so a solo founder could get the benefits of a company — limited liability and a separate legal identity — without needing a second shareholder, as a Private Limited requires. An OPC needs one member (who can also be the sole director) plus a mandatory nominee, who steps in if the member dies or becomes incapacitated. Its compliance is lighter than a Private Limited's.

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If you're a solo founder, you've probably faced a frustrating choice: a sole proprietorship gives no liability protection, but a Private Limited company needs at least two people. The One Person Company (OPC) was created to solve exactly this — letting one person run a proper company alone. This guide explains what an OPC is, how the nominee works, its pros and cons, and when it's the right choice.

1What makes an OPC different

An OPC is a company with just one member (shareholder). That single feature changes everything for a solo founder:

One member, who can also be the only director — you run it alone
Limited liability — your personal assets are protected
A separate legal identity and perpetual succession, like any company
Lighter compliance than a Private Limited (e.g. fewer board-meeting requirements)

2The nominee — a unique requirement

Because there's only one member, the law requires you to appoint a nominee when you incorporate. The nominee is a person who will take over the OPC if you (the member) die or become unable to act. This ensures the company continues — its 'perpetual succession' — despite having a single owner.

The nominee must give consent, and you can change them later.

3OPC vs the alternatives

Where does an OPC sit between the options?

vs Sole proprietorship: an OPC gives limited liability and a separate identity; a proprietorship gives neither
vs Private Limited: an OPC needs only one person and has lighter compliance, but can't issue shares to outside investors or have multiple shareholders
vs LLP: both suit solo/small setups; an OPC is a company (better for some clients/credibility), an LLP is a partnership structure

⚠️ ImportantSince 2021, the earlier rules forcing an OPC to convert to a Private Limited once it crossed ₹2 crore paid-up capital or ₹20 crore turnover were removed — so an OPC can now grow without a mandatory conversion.

4When to choose an OPC

An OPC fits a specific situation:

You're a single founder who wants a company structure and limited liability, with no co-founders yet
You want more credibility than a proprietorship for clients and banks
You don't plan to raise external equity in the near term (an OPC can't issue shares to investors)

💡 ExampleA freelance consultant earning well wants liability protection and a more professional image than a proprietorship, but has no business partner. She registers an OPC with herself as the sole member and director, names her sister as nominee, and gets a proper company with limited liability — without needing to bring in a second shareholder.

5Who is actually eligible to form one

The eligibility rules are narrower than for a private limited company, and they catch people out at the incorporation stage.

Only a natural person who is an Indian citizen may incorporate an OPC or be its nominee — a company, LLP or trust cannot. Since the 2021 amendment, non-resident Indians are eligible, and the residency test for that purpose was reduced from 182 days to 120 days in the preceding financial year.

One person can incorporate only one OPC and can be the nominee of only one. A minor cannot be a member or a nominee, and cannot hold a beneficial interest in the shares.

⚠️ ImportantAn OPC cannot carry on non-banking financial investment activity, including investment in the securities of a body corporate, and cannot be incorporated as or converted into a section 8 company.

6The compliance an OPC still carries

Lighter compliance is the usual selling point, and it is genuinely lighter — but not light.

An OPC need not hold an annual general meeting, files the abbreviated annual return in Form MGT-7A, and is exempt from preparing a cash flow statement. Where there is only one director, a resolution entered in the minutes book and signed is enough to constitute a board meeting.

What remains: a statutory audit every year regardless of turnover, annual filing of financial statements in AOC-4, income-tax return and, where two or more directors are appointed, at least one board meeting in each half of the year with a gap of not less than ninety days.

✅ TipThe audit requirement applies from the first year and does not depend on turnover. A dormant OPC with no revenue still needs an auditor appointed within thirty days of incorporation.

7The nominee is a mechanism, not an heir

The nominee requirement is what makes an OPC possible at all, and it is widely misunderstood as a form of inheritance.

The nominee is named in the memorandum with their written consent in Form INC-3, and becomes the member only if the sole member dies or becomes incapable of contracting. Until then they have no rights at all — no shareholding, no say, no entitlement to information.

The member can change the nominee at any time, and the nominee can withdraw, in which case a replacement must be named. On becoming a member, the new member must in turn nominate someone within fifteen days.

⚠️ ImportantSince 2021 there is no forced conversion to a private limited company on crossing a turnover or capital threshold. Conversion is voluntary, and is done by increasing members and directors and filing the prescribed forms.

8Converting to a private limited company

Conversion is now entirely a choice, and it is worth knowing what it involves before an investor asks for it.

Since 2021 there is no threshold that forces it. An OPC converts voluntarily by increasing the number of members to at least two and directors to at least two, passing the necessary resolutions, altering the memorandum and articles, and filing the prescribed forms with the Registrar.

The company keeps its identity, its incorporation date and its PAN through the conversion — it is an alteration, not a new company. That matters for anything that runs from incorporation, including the ten-year window for the startup tax holiday.

Key takeaways

An OPC is a company that one person can own — solving the Private Limited's two-member requirement.
It gives limited liability and a separate legal identity, with lighter compliance.
A mandatory nominee takes over if the sole member dies or is incapacitated.
Since 2021, there's no forced conversion to Private Limited on crossing turnover/capital limits.
Best for solo founders wanting a company without co-founders or near-term equity raising.

Frequently asked questions

What is the difference between OPC and a Private Limited company?

An OPC has a single member and lighter compliance but can't raise equity from investors. A Private Limited needs at least two members and has heavier compliance, but can issue shares and onboard investors and ESOPs.

Why does an OPC need a nominee?

Because it has only one member, a nominee is required to ensure the company continues if the sole member dies or becomes incapacitated. The nominee takes over the OPC in that event, preserving its perpetual succession.

Can an OPC raise funding from investors?

Not by issuing shares to outside investors — an OPC has a single shareholder. If you plan to raise equity, you'd typically convert to a Private Limited first, which can have multiple shareholders and issue shares/ESOPs.

Does an OPC have to convert to a Private Limited after a certain size?

No longer — the rules requiring mandatory conversion above ₹2 crore capital or ₹20 crore turnover were removed in 2021. An OPC can now grow without being forced to convert (though you may choose to).

Can an NRI form an OPC?

Yes, since the 2021 amendment. Before that only a resident Indian citizen could. The residency test for this purpose was also reduced from 182 days to 120 days of stay in India in the preceding financial year. The member and the nominee must both be natural persons and Indian citizens.

Can I have more than one OPC?

No. One person can incorporate only one OPC, and can be the nominee of only one. If you become a member of a second OPC through the nominee route, you have to meet the eligibility conditions within a hundred and eighty days by transferring one of them.

Does an OPC need an audit even with no income?

Yes. Statutory audit applies from the first year regardless of turnover, and the first auditor must be appointed within thirty days of incorporation. A dormant OPC with no revenue still files AOC-4 and MGT-7A and still needs audited accounts, which is the cost founders most often overlook.

Does an OPC have to hold an annual general meeting?

No — the AGM requirement does not apply. It files the abbreviated annual return in Form MGT-7A and is exempt from preparing a cash flow statement. Where there is a single director, a resolution entered and signed in the minutes book is enough to constitute a board meeting.

Can an OPC run an investment or finance business?

No. An OPC cannot carry on non-banking financial investment activity, including investing in the securities of any body corporate. It also cannot be incorporated as, or converted into, a section 8 company. For those activities a different structure is required from the outset.