According to section 2 (62), 'One Person Company (OPC)' means a company which has only one natural person as a member. Since ‘One Person Company’ is a private company, it shall have all the features of a private company discussed earlier, including minimum paid-up capital as prescribed, restriction on transfer of its shares and prohibition on subscription to its shares by public. However, the limit on number of members shall not apply since it can have only one member. The only member of ‘OPC’ should state in the Memorandum, name of the nominee (with his prior written consent), who in the event of his death or his incapacity to contract shall become the member of the company.

One of the biggest advantages of a One Person Company (OPC) is that there can be only one member in a OPC, while a minimum of two members are required for incorporating and maintaining a Private Limited Company or a Limited Liability Partnership (LLP). Similar to a Company, a One Person Company is a separate legal entity from its promoter, offering limited liability protection to its sole shareholder, while having continuity of business and being easy to incorporate.

Though a One Person Company allows a lone Entrepreneur to operate a corporate entity with limited liability protection, a OPC does have a few limitations. For instance, every One Person Company (OPC) must nominate a nominee Director in the MOA and AOA of the company - who will become the owner of the OPC in case the sole Director is disabled. Also, a One Person Company must be converted into a Private Limited Company if it crosses an annual turnover of Rs.2 crores and must file audited financial statements with the Ministry of Corporate Affairs at the end of each Financial Year like all types of Companies. Therefore, it is important for the Entrepreneur to carefully consider the features of a One Person Company prior to incorporation.

A natural person shall not be a member of more than a One Person Company at any point of time, and the said person shall not be a nominee of more than a One Person Company.

GMTrix® is the market leader in company registration services in India, offering a variety of company registration like private limited company registration, one person company registration, Nidhi Company Registration, Section 8 Company Registration, Producer Company Registration and Indian Subsidiary registration. The average time taken to complete a one person company registration is about 10 - 15 working days, subject to government processing time and client document submission. Get a free consultation for one person company registration and business setup in India by scheduling an appointment with an GMTrix® Advisor.