Meaning of One Person Company

One-person company means as its name says that only one person in a company as a member. In other words, we can say one-person company can be incorporated by having an only one member.

The Companies Act, 2013 completely revolutionised corporate laws in India by introducing several new concepts that did not exist previously. On such game-changer was the introduction of One Person Company concept. This led to the recognition of a completely new way of starting businesses that accorded flexibility which a company form of entity can offer, while also providing the protection of limited liability that sole proprietorship or partnerships lacked.


1. Main advantage of the one-person company is limited liability of Member.

2. There are less compliances than a private limited company other than one-person company.

3. Perpetual Status.

4. The member can be exit easily by transferring his/her share.


1. Paid up share capital of the one-person company does not exceed Rs. 50 Lakh (i.e. paid up share capital ≤ 50 Lakh), and

2. Average annual turnover of the one-person company does not exceed Rs. 200 Lakh last 3 consecutive Year. (i.e. Average Annual Turnover ≤ 200 Lakh)

 Who can Form one-person company?

Only a natural person can form a one-person company. No artificial person like company, LLP, Partnership firm etc. can form One Person Company.


1. Compulsory Conversion: if the paid-up share capital or Average annual turnover exceed the limit mentioned above in limitation point, then the one-person company compulsorily required to be convert in private limited company having more than one member.

2. Voluntary Conversion: if such person company want to be convert into private limited company having more than one member then such company can be convert through application to MCA as per prescribed procedure at any time but at least after 2 year of incorporation.

 Limit of Directors:

Member of One-person company can appoint himself as a director. And total number of directors cannot be more than 15. (Maximum 15 director).


Every one-person company is mandatorily required to appoint nominee like relative, friends etc. Role of nominee is nothing till the death of such member.

One person can be a member in only one One-person company. In other words, one person cannot be more than one OPC.

Requirement to Incorporate One Person Company:

1. Digital Signature certificate: to apply 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 issued a certificate of Incorporation after verification of all documents.

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Qualification: CA in Practice
Company: Ankit Mahendra & Associates
Location: Lalitpur, Uttar Pradesh, IN
Member Since: 13 Jul 2020 | Total Posts: 14
I am qualified chartered accountant, engaged in practice and experience in Income Tax return filing, tax audit, Goods & Services Tax return filing, GST audit, various registration and incorporation etc. View Full Profile

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May 2021