What is a One Person Company?

What is a One Person Company?

A One Person Company is the simplest form of an organization structure wherein a company can be formed by one single person as a member or a shareholder. It is different from the traditional structure of having two members.

A One Person Company is a concept introduced by the Companies Act of 2013 which provides the flexibility to start a new business while also providing the protection of limited liability. This concept is not new to the world as this concept has been legally recognized in countries like the UK, USA, China, Singapore, Turkey, UAE and Pakistan. In India, this was adopted for the main motive of providing a base to new entrepreneurs in the market and making their contribution more effective in the economy.

An OPC is restricted from being converted into a Section 8 company. An OPC cannot get voluntarily converted into any other kind of company until the expiry of two years from the date of its incorporation.

Definition of One Person Company:

Section 2(62)of Companies Act defines a One Person Company as a company which has one person as its member. Furthermore, members of a company are nothing but subscribers to its memorandum of association, or its shareholders. So, an OPC is effectively a company that has only one shareholder as its member.

Entrepreneurs who have recently started their business and whose businesses lie in the primary stage prefer OPCs rather going for sole proprietorship. 

Features of One Person Company:

  • Private Company:

Section 3(1)(c) of the Companies Act describes an  OPC as a private company where a single person can form a company for any legal motive.

  • Nominee:

This is a unique feature provided by an OPC which separates it from other kinds of companies as its sole member has to mention a nominee while registering the company.

  • Perpetual succession:

As OPC has only one member so in case of the death of its member it is up to the nominee to decide whether to choose or reject its sole membership.


To start an OPC only 1 director is mandatory and the OPC can have a maximum of 15 directors.

  • Share capital:

OPC does not require any prescribed amount as minimum paid-up capital according to Companies Act, 2013.

  • Special Exemptions:

OPC provides some special privileges and exemptions under the Companies Act.

Why OPC?

OPC provides a number of privileges and exemptions. It is usually known for its organised sector of proprietorship and any new entrepreneur can opt for OPC with minimum requirements.

Under the Companies Act following are the advantages which an entrepreneur can enjoy:

  • An OPC is exempted from holding annual general meetings and several provisions of meetings and quorum do not apply to them.
  • It is not mandatory for an OPC to include cash flow statements in their financial statements.
  • Annual returns can be signed by the directors of OPC
  • OPC does not apply provisions of independent directors and it also provides additional grounds for vacation of a director’s office.
  • As compared to other companies they provide more remuneration to their directors.

Team Delfyle wishes you the very best of luck for your amazing journey ahead. In case of any further queries, feel free to get in touch with us at info@delfyle.com for a chat, absolutely free of cost!

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