How to Form a One Person Company (OPC) in India – A Complete Guide

Establishing a legal business structure is one of the first decisions every entrepreneur must make. For solo founders who wish to enjoy the benefits of limited liability and a corporate identity without needing a business partner, a One Person Company (OPC) is the perfect choice.

As expert Chartered Accountants in Mumbai, we at Makwana Sweta & Associates have guided countless individuals across India in forming OPCs. In this guide, we break down everything you need to know—eligibility, process, documents, advantages, and compliance requirements.

What is a One Person Company (OPC)?

A One Person Company (OPC) is a private limited company structure introduced under Section 2(62) of the Companies Act, 2013. It allows a single entrepreneur to operate with a corporate identity, offering benefits such as limited liability and perpetual succession.

The idea is to support small business owners and solo founders in enjoying the legal advantages of a private limited company without the need to onboard another shareholder or director.

Eligibility Criteria to Form an OPC

Before diving into the registration process, it’s important to know who can form an OPC in India:

Only a natural person who is an Indian citizen and resident (residing in India for at least 120 days during the financial year) can form an OPC.
A person can form only one OPC at a time.
The person must nominate another individual (also a natural person, Indian citizen and resident) to act as the nominee in case of death/incapacity.

Note: Certain businesses such as Non-Banking Financial Companies (NBFCs) and those dealing in investment in securities are not allowed to register as an OPC.

Documents Required for OPC Registration

You’ll need to submit the following documents while incorporating an OPC:

For the Director and Nominee:

PAN Card (mandatory)
Aadhaar Card or Voter ID/Passport/Driving License (as address proof)
Latest utility bill or bank statement (as residence proof)
Passport-size photograph

For the Registered Office:

Rent Agreement (if rented premises)
NOC from the property owner
Latest utility bill (not older than 2 months)

Step-by-Step Process to Register an OPC

Registering an OPC involves a series of streamlined steps facilitated by the Ministry of Corporate Affairs (MCA). Here’s how to form a One Person Company:

Step 1: Obtain Digital Signature Certificate (DSC)

The first step is to acquire a Digital Signature Certificate for the director to sign e-forms digitally. This can be done online within 1–2 working days.

Step 2: Apply for Director Identification Number (DIN)

Once you have your DSC, the next step is to apply for a DIN by filing Form DIR-3, along with ID proof and address proof.

Step 3: Reserve Company Name

Using the RUN (Reserve Unique Name) web form on the MCA portal, propose a unique name for your OPC. Ensure that it aligns with the naming guidelines prescribed by MCA.

Step 4: File SPICe+ Form

SPICe+ is an integrated form for company incorporation. Fill in all necessary details including:

Company name
Business activity code
Details of director and nominee
MOA (Memorandum of Association)
AOA (Articles of Association)
PAN and TAN applications

Step 5: Issue of Certificate of Incorporation

Once documents are verified and approved, the ROC (Registrar of Companies) issues a Certificate of Incorporation, along with PAN and TAN.

Congratulations! You are now the proud owner of a registered One Person Company.

Benefits of Forming an OPC

1. Limited Liability

The shareholder’s personal liability is limited to their investment in the company. Personal assets are protected.

2. Separate Legal Entity

An OPC has its own identity, separate from the owner. It can enter into contracts and own property in its name.

3. Ease of Management

Since there’s only one shareholder and director, decision-making is quicker and less complex.

4. Perpetual Succession

The nominee director can take over in case of the promoter’s death or incapacity, ensuring business continuity.

5. Better Credibility

Compared to sole proprietorships, OPCs have better standing in the eyes of banks and investors.

Annual Compliance Requirements for OPC

After registration, OPCs must comply with several annual requirements:

Filing of Annual Return (Form MGT-7A)
Filing of Financial Statements (Form AOC-4)
Income Tax Return filing
Maintaining proper books of accounts
Statutory audit by a Chartered Accountant in practice

Visit Ministry of Corporate Affairs website for latest updates

Taxation of OPCs

An OPC is taxed at a flat rate of 22% (under Section 115BAA), excluding surcharge and cess. OPCs are also eligible for various startup benefits under the Startup India initiative if they meet prescribed criteria.

Additionally, OPCs are required to deduct and deposit TDS, file GST returns (if registered), and adhere to applicable tax laws. Having a trusted CA service provider like Makwana Sweta & Associates ensures timely and accurate compliance.

Common Mistakes to Avoid While Forming an OPC

Choosing a name too similar to existing companies (may lead to rejection)
Not nominating a valid nominee
Using residential address without owner’s NOC
Missing out on mandatory compliance post-incorporation

Avoid these pitfalls by consulting experienced Tax Consultants in Mumbai to guide you through the process.

Final Thoughts

Forming a One Person Company is a smart choice for solo entrepreneurs aiming for structure, credibility, and liability protection. With simplified compliance and a distinct legal identity, OPCs serve as an ideal launchpad for growing businesses.

If you’re ready to take the leap, our team at Makwana Sweta & Associates is here to help. As a seasoned Chartered Accountant in Mumbai, we offer end-to-end company formation services PAN India.