One Person Company: Features, Benefits, Characteristics, Registration Process in India

Start a business solo with One Person Company - enjoy limited liability, full control, and easy setup for entrepreneurs in India.
Check Eligibility
Business Loan for One Person Company
Check Eligibility
3 min
27 January 2026

In today’s competitive business landscape, many aspiring entrepreneurs wish to launch their own ventures but face challenges around liability, legal structure, and control. A One Person Company (OPC) bridges this gap by offering the simplicity of a sole proprietorship along with the legal protection of a private limited company.

Tailored for single business owners in India, an OPC provides limited liability, complete operational control, and relatively simpler compliance requirements. This guide explains the key features, registration process, benefits, and challenges of OPCs, giving you a clear roadmap to start and manage your business with confidence.

What is a One Person Company?

A One Person Company (OPC) is a type of business meant for individuals who want to run a company on their own. It allows one person to own and manage the business while still getting the benefits of a company, such as limited liability. This means your personal assets are kept separate from the company’s assets. 

OPC was introduced under the Companies Act, 2013 in India. It sits between a sole proprietorship and a private limited company. Unlike a sole proprietorship, your personal liability is limited. At the same time, it has simpler rules and fewer compliance requirements than a private limited company. An OPC must name a nominee who will take over the company if the owner is unable to continue.

Business Loan
Business Loan

Features of a One Person Company

  • OPC is owned and managed by a single individual, the sole shareholder and director.
  • Limited liability protection ensures the personal assets of the owner are safeguarded.
  • OPC offers perpetual succession, meaning the company continues to exist even in the event of the owner's demise.
  • There is no minimum capital requirement for incorporating an OPC, making it accessible to small business owners.

Characteristics of One Person Companies (OPC)

A One Person Company (OPC) comes with specific rules and conditions that define its structure, ownership, and operations.

  • Eligibility: Only a natural person who is an Indian citizen and resident of India can incorporate an OPC and act as its sole member.

  • Nominee requirement: The sole member must designate a nominee at the time of registration. A person cannot incorporate or join more than one OPC as a nominee.

  • Restriction on minors: Minors cannot hold beneficial shares, nor can they become members or nominees of an OPC.

  • Section 8 restriction: An OPC cannot be incorporated or converted into a company under Section 8 of the Companies Act.

  • Financial activities restriction: OPCs are barred from engaging in non-banking financial investment activities, such as purchasing corporate securities.

  • Change in structure: The corporate structure cannot be changed within the first two years of incorporation, except if paid-up capital exceeds Rs. 50 lakh or average turnover crosses Rs. 2 crore.

  • Dual membership restriction: If a person who is already a member of one OPC becomes a nominee in another OPC, they must resign from one within 180 days.

  • Naming requirement: Wherever the company’s name is used, the words “One Person Company” must be mentioned in brackets under the name.

Formation of One Person Companies

  • OPC registration involves a single person acting as both the shareholder and director.
  • The individual must appoint a nominee who will take over the company's operations in the event of their death or incapacity.
  • The process includes obtaining Digital Signature Certificates (DSC), Director Identification Numbers (DIN), and registering the company with the Ministry of Corporate Affairs.

Taxation of One Person Company (OPC) in India

A key difference between a One Person Company (OPC) and a Sole Proprietorship is how they are taxed, as an OPC is treated as a corporate entity for tax purposes.

Corporate Tax Rates

  • Standard rate: 30% on net profits.
  • Concessional rate (Section 115BAA): 22% (plus surcharge and cess) for companies that give up certain exemptions.
  • New manufacturing companies (Section 115BAB): 15% (plus surcharge and cess) for companies set up on or after 1 October 2019.
  • Lower rate: Companies with turnover up to ₹400 crore may be taxed at 25%.

Key Tax Provisions

  • Minimum Alternate Tax (MAT): Applies when tax under normal rules is less than 15% of book profits.
  • Dividend tax: Dividends are taxed in the hands of shareholders.
  • TDS compliance: Required regardless of the company’s turnover.

Compliance Requirements

  • Filing of ITR-6.
  • Mandatory statutory audit.
  • Regular MCA filings including MGT-7 and AOC-4.

Tax Benefits

  • Startup India scheme: Eligible OPCs can claim 100% tax exemption on profits for three consecutive years under Section 80-IAC.
  • Business expenses: Allowed as deductions.

Comparison with Sole Proprietorship

  • OPCs are taxed at fixed corporate rates, unlike sole proprietorships which follow individual tax slabs, and they also offer the benefit of limited liability.

Advantages of One Person Company (OPC)

The OPC structure provides several advantages designed for solo entrepreneurs:

  • Limited Liability Protection: Safeguards personal assets, giving the owner financial security and peace of mind.
  • Full Control: The sole member/director has complete authority over business operations, management, and decision-making without needing approval from partners or multiple shareholders.
  • Improved Credibility: Being a registered company, even as an OPC, enhances trust with banks, vendors, and customers compared to unregistered Sole Proprietorships.
  • Simplified Compliance: OPCs follow compliance requirements similar to a Private Limited Company but benefit from exemptions, such as holding only two Board Meetings per year (one in each half) and no need to conduct an Annual General Meeting (AGM).

Disadvantages of One Person Company

Entrepreneurs should also be aware of these limitations:

  • Restricted Membership: Only one person can form a single OPC, which limits the possibility of running multiple ventures under the same structure.
  • Compliance Requirements: While simpler than a Private Limited Company, OPCs still need to comply with regulations such as mandatory annual audits and filing annual financial statements with the Registrar of Companies (ROC), which can be more complex and costly than a Sole Proprietorship.
  • Limited Funding Opportunities: With a maximum of one shareholder, OPCs may face challenges in accessing large-scale funding, such as venture capital or equity financing.

One person company under company law

The introduction of One Person Companies (OPCs) under Indian company law brought an important change in the way businesses can be set up. Before this, individuals could only run businesses as sole proprietors or through partnerships, which offered limited legal protection. With OPCs, a single individual can enjoy the advantages of a company structure, such as better legal protection, while still having full control over the business.

One Person Company (OPC) registration process

Setting up an OPC in India is a simple online process overseen by the Ministry of Corporate Affairs (MCA):

  1. Obtain DSC and DIN: The proposed director must first acquire a Digital Signature Certificate (DSC) for signing forms and a Director Identification Number (DIN).

  2. Name Approval: Apply through the MCA portal using the RUN service to secure a unique company name, which must end with “(OPC) Private Limited.”

  3. File Documents via SPICe+ Form: Submit the integrated SPICe+ form to the Registrar of Companies (ROC), including:

  4. Certificate of Incorporation: Once approved, the ROC issues the Certificate of Incorporation, officially forming the OPC.

To cover incorporation costs such as filing fees, DSC charges, and initial working capital, entrepreneurs often consider financial support. A business loan can provide the necessary funds to ensure smooth operations right from the start.

Compliance requirements for a One Person Company (OPC)

Difference between OPC and sole proprietorship

Feature

Sole Proprietorship

One Person Company (OPC)

Legal status

Not a separate legal entity; owner and business are the same.

A separate legal entity, distinct from its owner.

Liability

Unlimited liability; personal assets can be used to repay business debts.

Limited liability; risk is limited to the capital invested.

Registration

No compulsory central registration; local licences (like GST) may be required.

Mandatory registration with the Ministry of Corporate Affairs (MCA) under the Companies Act, 2013.

Succession

Business ends on the death or incapacity of the owner.

Perpetual succession; continues through a mandatory nominee.

Taxation

Taxed under individual income tax slab rates.

Taxed as a company at corporate tax rates (such as 30% or 22%).

Compliance

Minimal compliance; mainly personal income tax filing.

Moderate to high compliance, including RoC filings and statutory audit.

Fundraising

Limited to personal savings or small business loans.

Easier access to funding due to higher credibility with banks and investors.


Conclusion

In conclusion, One Person Company (OPC) offers a unique business structure for solo entrepreneurs seeking limited liability protection and full control over their ventures. While OPCs come with advantages such as simplified compliance and credibility, it's essential to weigh the limitations before making a decision. By understanding the registration process entrepreneurs can embark on their entrepreneurial journey with confidence and determination.

For entrepreneurs exploring funding options after incorporation, understanding business loan eligibility and using tools like a business loan EMI calculator can help in planning finances effectively and supporting future growth.

Helpful resources and tips for business loan borrowers

Types of Business Loan

Business Loan Interest Rates

 Startup Business Loans
Business Loan for Women

Unsecured Business Loan

How to Apply for Business Loan

Working Capital Loan

MSME Loan

Mudra Loan

Machinery Loan

Personal Loan for Self Employed

Commercial Loan

Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.
For customer support, call Personal Loan IVR: 7757 000 000

Frequently asked questions

Who is eligible to be a member of an OPC?
To qualify as a member of a One Person Company (OPC), an individual must be an Indian citizen and meet the criteria set forth by the Companies Act, 2013. Additionally, only a natural person, not any other legal entity, can be the sole member of an OPC.
Is there any tax advantage on forming an OPC?
Yes, forming an OPC can offer certain tax advantages. OPCs enjoy similar tax benefits as other private limited companies, including the ability to avail tax deductions, exemptions, and incentives provided under the Income Tax Act, 1961. Additionally, OPCs may benefit from reduced tax rates applicable to small businesses.
What is the limit of one person company?

The limit of a One Person Company (OPC) is specified in terms of turnover and paid-up capital. As per the Companies Act, 2013, an OPC must have a maximum turnover of Rs. 2 crore and a paid-up capital not exceeding Rs. 50 lakh. Beyond these thresholds, an OPC must convert into a private limited company.

Which is superior, OPC or Pvt Ltd?

The superiority depends on the business needs. OPC suits solo entrepreneurs, while Pvt Ltd is suitable for multiple stakeholders.

Is OPC considered a startup?

Yes, OPC is a viable option for startups due to its simplified compliance requirements and limited liability structure.

Can OPC appoint two directors?

No, OPCs are mandated to have only one director, distinguishing them from other company structures.

Which is better, OPC or Pvt Ltd?

Choosing between OPC and Private Limited depends on your business goals. An OPC is better for solo entrepreneurs who want full control with limited liability, while a Pvt Ltd is more suitable for businesses aiming to raise funds, have multiple shareholders, and scale faster. Pvt Ltd companies also tend to have higher credibility with investors and lenders.

Show More Show Less