CS Dhruval Baldha

CS Dhruval BaldhaIntroduction: The Companies Act, 2013 has introduced new concept of ‘One Person Company’ (herein after referred to as ‘OPC’). Section 3 (1) (c) has been notified vide notification dated 26th March, 2014 and the same shall be effective from 01st April, 2014.

It is a new form of business by which company can be incorporated with one person only. It enables the entrepreneur carrying the business in the Sole-Proprietor form of business to enter into a Corporate Framework. One Person Company is a hybrid of Sole-Proprietor and Company form of business, and has been provided with relaxed requirements under the Companies Act, 2013.

Governing Act and Rules:


According to section 2 (62) of the companies Act, 2013, ‘One Person Company (OPC)’ means a company which has only one person as a member.

Further, An OPC is owned and can be managed by one person as the sole member and director.

Member of OPC:

  • Only a natural person (Rule 3(1)(a));
  • The person should be an Indian citizen and resident in India only (Rule 3(1)(a));
  • No person shall be eligible to incorporate more than one OPC (Rule 3(2)).
  • A member of OPC becomes a member in another OPC, by virtue of his being a nominee in that OPC; such member shall meet the eligibility criteria specified in sub rule (2) of rule 3 within a period of one hundred and eighty (180) days (Rule 3 (3));
  • No minor shall become member OPC or can hold share with beneficial interest (Rule 3 (4)).

Nominee of OPC:

The subscriber to the memorandum of OPC shall nominate a person, after obtaining prior written consent of such person, who shall, in the event of the subscriber’s death or his incapacity to contract, become the member of that OPC (Rule 4 (1)).

  • Only a natural person can become a nominee (Rule 3(1) (b));
  • The nominee should be an Indian citizen and resident in India only (Rule 3(1) (b));
  • No person a become nominee in more than one OPC (Rule 3(2));
  • No minor shall become nominee of the OPC (Rule 3 (4)).

Explanation – the term “resident in India” means a person who has stayed in India for a period of not less than one hundred and eighty two (182) days during the immediately preceding one calendar year.

Directors of OPC:

  • Minimum one director is required.
  • First director shall be the person whose name is mentioned in Articles of Association.
  • The first director shall hold the office until the holding of general meeting. However, the first director can be re-appointed or another person can appointed on that meeting.
  • The OPC may have a maximum number of 15 directors.

Paid up share capital:

 Minimum paid up capital of Rs. 1,00,000/- (Rupees One Lakh).

Board of directors meeting:

The OPC is required to hold minimum two Board meeting during a calendar year and one meeting in each half of the calendar year and gap between two meetings is not more than 90 days [Section (173)(5)].

Annual general meeting:

The provision of holding of Annual General Meeting is not applicable to OPC.

Financial Statement of OPC:

The Financial statement of OPC includes balance sheet, profit and loss account and statement of changes in equity.

Financial statement may not include the cash flow statement.

The OPC is required to file the copy of financial statement within 180 days from the closure of the financial year [Section 137(1)].

Withdrawal of consent by nominee:

  • The nominee may, withdraw his consent by giving a notice in writing to –
  • such sole member; and
  • The One Person Company.

The sole member shall nominate another person as nominee within fifteen (15) days of the receipt of the notice of withdrawal and shall send an intimation of such nomination in writing to the Company, along with the written consent in Form No INC 3 [Rule 4 (3)].

Change the name of nominee:

  • The subscriber or member of OPC may, by intimation in writing to the company, change the nominee at any time for any reason including in case of death or incapacity to contract of nominee and nominate another person after obtaining the prior consent of such another person in Form No INC 3 [Rule 4 (5)].
  • The company, in both the case, shall within thirty (30) days of receipt of the notice of withdrawal of consent or change the name as the case may be, file with the Registrar, in Form No INC 4 along with the written consent of such another person so nominated in Form No. INC 3 [Rule 4 (4) & (5)].

Appointment of new nominee the case of change in membership:

  • Where the sole member of One Person Company ceases to be the member in the event of death or incapacity to contract and his nominee becomes the member of such One Person Company, such new member shall nominate within fifteen(15) days of becoming member, a person who shall in the event of his death or his incapacity to contract become the member of such company, and the company shall file with the Registrar an intimation of such cessation and nomination in Form No INC 4 within thirty days of the change in membership and with the prior written consent of the person so nominated in Form No. INC 3.

Exemptions available to OPCs under the Companies Act, 2013:

Following Sections are not applicable to OPCs:

  • Section 96 – Option to dispense with the requirement of holding an AGM.
  • Section 98 – Power of Tribunal to call meetings of members.
  • Section 100 – Calling of extraordinary general meeting.
  • Section 101 – Notice of meeting.
  • Section 102 – Statement to be annexed to notice.
  • Section 103 – Quorum for meetings.
  • Section 104 – Chairman of meetings.
  • Section 105 – Proxies.
  • Section 106 – Restriction on voting rights.
  • Section 107 – Voting by show of hands.
  • Section 108 – Voting through electronic means.
  • Section 109 – Demand for poll.
  • Section 110 – Postal ballot.
  • Section 111 – Circulation of members’ resolution.


  • OPC cannot be incorporated or converted into a company under section 8 of the Act. (Rule 3 (5)).
  • OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporates (Rule 3 (6)).
  • No OPC can convert voluntarily into any kind of company unless two years have expired from the date of incorporation ((Rule 3 (7));

Exception – If paid up share capital exceeds Rs. 50,00,000/- (Rupees Fifty Lakhs) or its average annual turnover during the relevant period exceeds Rs. 2,00,00,000/- (Rupees Two Crores) or if during financial year its balance sheet total exceeds one crore rupees, it would cease to be continue as an OPC. However, such OPC would be mandatorily required to convert itself within a period of six months into a Private or Public Company.


The advantage of an OPC is that a single person can start a business and he can independently carry out business under the company structure. OPC provides greater flexibility to an individual to manage his business efficiently and enjoy its benefits. This is a concept that is expected to give big push to Corporatization in the country.

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Category : Company Law (4193)
Type : Articles (18521)
Tags : Companies Act (2649) Companies Act 2013 (2420) OPC (40)

0 responses to “Note on One Person Company (OPC)”

  1. VIPIN says:


  2. B. VIVEK says:

    could one person could add a additional type of business more then one ONE PERSON COMPANY (OPC)?

  3. Anushk says:

    Section 2 cluase 68 of the Companies Act 2013 includes OPC in the definition of a private company and hence OPC cannot be registered as a public limited company.

    However, as per the Comapnies (Incorporation) Rules, 2014, an OPC shall cease to be an OPC on the day its paidup share capital (including convertible preference share capital) exceeds Rs.50 lac or its average turnover for the period increases Rs. 2 crores. The company shall be required to convert itself into a private company(with 2 members and 2 directors) or a public company(with 7 members and 3 directors) within 6 months from the date it ceases to be an OPC in accordance with provisions of section 18 of the Companies Act, 2013.

  4. Nilu says:

    Can OPC is public company ?. if yes, then what about the criteria of Minimum one Lady Director in these co. ???

  5. E P KATHIRVEL says:

    To Mr.Kailesh;
    as the rule reproduced here:
    3. One Person Company.-
    (1) Only a natural person who is an Indian citizen and resident in India-
    (a) shall be eligible to incorporate a One Person Company;
    (b) shall be a nominee for the sole member of a One Person
    (2) No person shall be eligible to incorporate more than a One Person Company or become nominee in more than one
    such company.

    One to one is allowed as per 3(2).

  6. kailash kumae says:

    No, one person could incorporate more then one ONE PERSON COMPANY (OPC)

  7. narendra k agarwal says:

    could one person could incorporate more then one ONE PERSON COMPANY (OPC)?

    Narendra K Agarwal

  8. Mohit Saluja says:

    very nice

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