One Person Company (OPC): Start a Company Alone, Rules and Limits
A one person company (OPC) lets you own a company alone, with limited liability. You must be an Indian citizen, name a nominee who consents, and hold only one OPC. Since 1 April 2021 no capital or turnover limit forces you to convert. The company still needs a yearly audit and annual filings.
- Only an individual who is an Indian citizen can be the member or the nominee. Living abroad is not a bar.
- One person can be the member of only one OPC.
- The nominee's consent, Form INC-3, is now a declaration inside SPICe+ Part B that the nominee signs with a digital signature.
- The old conversion limits, Rs 50 lakh of paid-up capital and Rs 2 crore of average turnover, were removed from 1 April 2021.
- An OPC cannot become a section 8 company and cannot run an investment business.
In this guide
- What is an OPC, and why does it exist?
- Who can form one?
- The nominee and the consent
- What an OPC cannot do
- Do the capital and turnover limits still apply?
- Compliance: OPC compared with a private limited company
- A worked example: does an OPC save tax?
- When should you convert, and how?
- Who does an OPC suit?
- The mistake people usually make
What is an OPC, and why does it exist?
It is a private company with a single shareholder. The law calls that shareholder the member. Before the Companies Act, 2013, a solo founder who wanted a company had to borrow a second name for the share register. The OPC removed that workaround.
What do you get? A separate legal person. The company owns the stock, signs the lease and owes the debts. Your loss is capped at the share capital you put in, unless you sign a personal guarantee. If you are still choosing between forms, start with our comparison of proprietorship, LLP, OPC and private limited.
Who can form one?
The Ministry of Corporate Affairs (MCA) puts it in one line: only a natural person who is an Indian citizen, whether resident in India or otherwise, can be the member or the nominee. A company, an LLP or a foreign citizen cannot.
How many days make you "resident"? Here the official pages do not agree neatly. The government's press release of 3 February 2021 says the period was cut from 182 days to 120 days. MCA's own OPC help page, read on 12 November 2026, carries a garbled line that mixes the two numbers. We take 120 days in the preceding financial year as the figure, and tell you plainly that MCA's page does not state it cleanly. In practice it matters less than it did, because a non-resident citizen may form an OPC anyway.
One more check if you live abroad. The general rule for every company still asks for one director who has stayed in India for 182 days or more in the financial year. An OPC can run with one director, so that director must meet this test.
The nominee and the consent
A company with one owner has an obvious weak point: what happens if you die or lose the capacity to contract? So the law makes you name a nominee at the start. That person becomes the member if you cannot continue.
- The nominee must also be an individual and an Indian citizen. The rules, as reproduced by publishers, bar a minor from being member or nominee.
- The nominee must agree first. The consent is Form INC-3. MCA's help page says INC-3 is now part of SPICe+ Part B as a declaration, and the nominee's Digital Signature Certificate (DSC) is affixed to it.
- A nominee can withdraw, and you can change the nominee whenever you like. Both go to the Registrar in web form INC-4. The rules give you 15 days to name a replacement and the company 30 days to file.
Pick someone who knows they are named and could run or wind up the business. A spouse, parent or adult child is the usual choice.
What an OPC cannot do
| Restriction | What it means for you |
|---|---|
| One OPC per person | You cannot be the member of two. If you inherit a second one as its nominee, you have 180 days to leave one of them |
| No second shareholder | A co-founder or investor cannot take shares. You convert to a private limited company first |
| No section 8 route | An OPC cannot be set up as, or converted into, a non-profit company under section 8 |
| No investment business | It cannot carry on non-banking financial investment activity, including investing in the securities of other bodies corporate |
| No minor | A minor cannot be the member or the nominee |
MCA lists two reasons an OPC application gets rejected: articles that provide for issuing shares and debentures, and an objects clause that talks of issuing shares, debentures or making investments.
Do the capital and turnover limits still apply?
No. Earlier, an OPC had to convert once its paid-up capital went past Rs 50 lakh or its average annual turnover went past Rs 2 crore. It also had to wait two years before converting by choice. The Companies (Incorporation) Second Amendment Rules, 2021 removed all of this from 1 April 2021. MCA's help page confirms that an OPC may continue as an OPC above both figures.
Compliance: OPC compared with a private limited company
| Point | OPC | Private limited |
|---|---|---|
| Members and directors | One member, at least one director, plus a nominee | At least two of each |
| Annual general meeting | Not required | Every year |
| Board meetings | One in each half of the calendar year, at least 90 days apart. Commentators read the law as needing none where there is a single director | Usually four a year |
| Statutory audit | Every year | Every year |
| Annual return | MGT-7A, the abridged form | MGT-7, or MGT-7A if it is a small company |
| Cash flow statement | Not required | Required unless it is a small company |
| Income tax | Company rates | Company rates |
So the saving is in meetings and signatures, not in the audit or the filings. The declaration of commencement of business, Form INC-20A, is due within 180 days of incorporation here too.
A worked example: does an OPC save tax?
Assumptions: rates for FY 2025-26, new regime, no other income. Nisha's business earns Rs 12 lakh before paying her anything.
- As a proprietor. Her income is Rs 12 lakh. The rebate for income up to Rs 12 lakh brings her tax to nil.
- As an OPC that pays her nothing. The company pays 22% plus surcharge and cess, about 25.17%. Tax: Rs 3,02,016.
- As an OPC that pays her a salary of Rs 9 lakh. The company's profit drops to Rs 3 lakh and its tax to Rs 75,504. Her salary stays under Rs 12 lakh, so her own tax is nil.
Even managed well, the OPC costs Rs 75,504 in tax plus an audit fee, against nil as a proprietor. At this size you choose an OPC for limited liability and for buyers who want to deal with a company. You do not choose it for tax.
When should you convert, and how?
Convert when a second owner arrives: a co-founder, an investor, or an employee you want to give shares to. The steps for a private limited company are short.
- Bring in a second member and a second director.
- Pass a special resolution and alter the memorandum and articles.
- File web form INC-6 within 30 days of the resolution.
For a public company you need seven members and three directors. After that, the rules in our guide to the private limited company process apply to you.
Who does an OPC suit?
- A solo seller or consultant who signs leases, imports, gives credit or hires, and wants personal assets kept apart.
- A founder whose buyers or marketplaces prefer a company.
- Not a founder expecting an investor within a year. Start as a private limited company and skip the conversion.
- Not someone earning a few lakh with little risk. A proprietorship is cheaper to run.
The mistake people usually make
Reading "one person" as "no paperwork". The audit, the financial statements and the annual return fall due every year, sales or no sales, and late forms attract additional fees for each day of delay. The second mistake is a nominee who was never asked. The consent needs that person's digital signature, so a surprise nominee stalls the filing. Speak to the nominee before you start, and keep the papers in our OPC documents checklist ready.
Sources
- MCA: FAQs on One Person Company (checked 12 Nov 2026)
- MCA: FAQs on SPICe+ and linked filings (checked 12 Nov 2026)
- PIB: MCA amends One Person Companies rules, 3 Feb 2021 (checked 12 Nov 2026)
How AprilTax can help
AprilTax registers one person companies online. You fill one form with the proposed names, the business activity, your details and the nominee's name, and upload the documents. A Tax Expert takes it forward. The fee is shared on a call. Start at company registration.
Frequently asked questions
Can an NRI form a one person company in India?
How many days must I stay in India to count as resident for an OPC?
Can I own two one person companies?
Who can be the nominee of an OPC?
Does an OPC have to convert when turnover crosses Rs 2 crore?
Does an OPC need an audit every year?
How do I convert an OPC into a private limited company?
Is tax lower in an OPC than in a proprietorship?
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