One Person Company – Advantages, Disadvantages and Registration Process

One Person Company or OPC is included in the meaning of a Private Limited company and therefore all the provisions applicable to a Private Limited Company are applicable to OPC also.

The minimum requirements for an OPC are:

  • Minimum 1 Shareholder
  • Minimum 1 Director; The director and shareholder can be the same person
  • Minimum 1 Nominee
  • Minimum Share Capital shall be Rs. 1 Lac
  • Letters ‘OPC’ to be suffixed with the name of OPCs to distinguish it from other companies


Advantages of forming One Person Company are:

  • OPCs have been provided with a number of exemptions and therefore have lesser compliance related burden
  • OPC can be called an organized form of proprietorship business.
  • OPC gives the advantage of limited liability to entrepreneurs whereby the liability of the member will be limited to the unpaid subscription money.
  • OPC enjoys corporate status in society which helps the entrepreneur to attract quality workforce.
  • It is easier for OPC to obtain loans from banks as opposed to a sole proprietorship.
  • The complete control of the business is with the owner which leads to fast decision making and execution.
  • Exemptions provided under the companies act are:
    • No requirement to hold annual or Extra Ordinary General Meetings
    • OPC has to conduct at least one meeting of the Board of Directors in each half of a calendar year and the gap between the two meetings shall not be less than 90 days.
    • The provisions of Section 174 (Quorum for meetings of Board) will not apply to OPC in which there is only one director on its Board of Directors.
    • There is no need to hold board meeting in case the OPC is having only one director and all the businesses to be at the transacted meeting of the Board are entered into minutes book maintained under section 118.
  • Minimum filings with ROC
  • The mandatory requirement of rotation of auditors is not applicable on OPC


Disadvantages of forming One Person Company are:

  • OPC is suitable for a small business only as an OPC can have a maximum share capital of Rs. 50 Lakhs or maximum turnover of Rs. 2 Crores
  • In case the maximum limit specified in the above point is exceeded the OPC will have to be converted into a Private Limited Company.
  • The concept of OPC is defined in Companies Act and not under the I.T Act so, the tax rate of 30% applicable to a private limited company is applicable on the OPC.
  • Higher incorporation costs as no incorporation is needed under proprietorship.
  • A person is not eligible to form more than one OPC and can also not be the nominee in more than one OPC.


Registration process:

The process of incorporation of OPC is same as that of a Private Limited Company given after the topic Private Limited Company (add hyperlink)

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