One Person Company Registration

OPC stand for One Person Company, Article 2 (62) of the Companies Act defines a sole proprietorship as a company that has only one person as a member. So a OPC is effectively a company that has only one shareholder as a member. These companies are usually created when there is only one founder / promoter for the business.

Why OPC 

• Complete Control of the Company with single owner :- This leads to quick decision making and execution. However, you can appoint up to 15 directors in the OPC for administrative functions, without giving them any participation.​
• Flexibility and Tax Saving:-  It is possible for an OPC company to enter into a valid contract with its shareholder or directors. This means that as a director you can receive remuneration, as a landlord you can receive a rent, as a creditor you can lend money to your own company and earn interest. Directors' compensation, rent and interest are deductible expenses that reduce the Company's profitability and ultimately reduce the taxable income of your business.​
• Organised sector of Ownership:- OPC will incorporate the unorganized property sector into the organized version of a limited liability company. Several small and medium-sized businesses, operating as sole proprietors, can enter the corporate domain. The organized version of OPC will open the way for more favorable banking facilities. The owners always have unlimited liability. If that owner does business through an OPC, the member's liability is limited.
• Charge of  Compliances:- The Sole Shareholder Company is included in the definition of “Private Limited Company” given in section 2 (68) of the 2013 Companies Act. Therefore, an OPC will be required to comply with the provisions applicable to private companies. However, OPCs have received a number of exemptions and therefore have a lower compliance burden.

Capital required to start an OPC

An OPC can be started with a minimum authorized capital of Rs. 1 lakh. There is no mandatory minimum paid-up capital requirement. So you can start as an OPC with a capital contribution as low as Rs. 2. However, when the paid-up capital exceeds Rs. 50 lakh, OPC must be converted into a limited liability company.

Are there any tax advantages to forming a OPC?

There is no specific tax advantage for an OPC over any other form. The tax rate is flat at 30%, other tax provisions such as MAT and Dividend Distribution Tax apply, as they apply to any other form of company.