One Person Company Formation Procedure



categoryCompany Law


The formation of OPC is an easy process, and its a new form of business. One Person Company is a Company that has only one person as to its member India according to Companies Act, 2013.

Formation of One Person Company is for a legal purpose by one person. One person company is formed by subscribing name to a memorandum and complying with the requirements of the act in respect of registration. OPC is a company that has only one member as its shareholder. It is a form of a company where the compliance requirements are lesser as compared to a private company.

While starting up a business, one question that comes to mind is the form of business, i.e., and it should be a Partnership or sole proprietorship or private limited company. So to reduce confusion, let's see OPC in more detail.




According to the Companies Act, 2013
Only a natural person who is an Indian Citizen and resident of India.
1. Shall be eligible to incorporate a One Person Company.
2. Shall be a nominee for the sole member of a One Person Company.
The same conditions apply to the nominee of the company. Law prohibits minors from becoming members or nominees of OPC.

Minimum Requirements for One Person Company

A. Minimum 1 director
B. Minimum 1 member
C. Minimum share capital shall be Rs.1 Lakh
D. Application of allotment Director Identification Number (DIN)
E. Digital Signature Certificate (DSC)

Features of One Person Company-
A. Single-member- OPC's can only have one member.
B. Nominee- Sole member of the company has to mention a nominee while registering the company.
C. No perpetual succession- In case of death of a member of OPC, it is on nominee whether he wants to become a member or not. So, no perpetual succession occurs like other companies.
D. No minimum paid-up share capital- Companies Act does not prescribe minimum paid-up share capital for OPC.


Formation Procedure of OPC

Step 1 – Application for Director Identification Number in form DIR-3 and DSC
A. Director Identification Number is a unique identification number issued by the Ministry of Corporate Affairs, for an existing director or a person intending to become a director of a company.
B. Documents required for DIR-3 application
          - Identity proof- a copy of the PAN card.
          - Address proof- a copy of passport or Election ID or voter ID or driving license or adhaar card or Electricity/ telephone bill.
          - Passport size photograph
          - Current occupation
          - Email address of the applicant
          - Mobile Number
          - Educational qualification
          - Verification to be signed by the applicant who applied for OPC
DIR-3 shall be digitally signed by the applicant and by either of the following -
1. Company Secretary (in whole-time practice) or Chartered Accountant (in full-time practice) or Cost Accountant.
2. Company Secretary in full-time employment or Director of the company in which the applicant is to be appointed as a director.

C. Digital Signature Certificate is the digital equivalent of paper certificates. Ministry of Corporate affairs accepts electronic submission of the form on its website the DSC is compulsory for all its users.

Step 2 – Search for the Availability of Name of the Company
An applicant has to provide at least six names according to preference, along with the meaning and significance of each word.

Step 3 – Application for Name Availability
After drafting the main object of the company, the applicant needs to file an Applicant for reservation of name with the registrar of the company. The applicant needs to give only two names according to preference, along with the meaning and significance of the word.

Step 4 – Preparation of form SPICE, SPICE MOA and SPICE AOA- 
A. Memorandum of Association covers fundamental provisions of the company’s Constitution, i.e., it includes the main object of the company.
   B. Article of Association contains rules and regulations of the company that governs the internal management of the company. It is a binding contract between the company and its members.

After receipt of an application, the registrar may be based on information, reserve the name for the period of 60 days from the date of application.

Form SPICE is required to be filed along with SPICE MOA and SPICE AOA
- Form SPICE -for application of incorporation of the company.
Mandatory Attachments to form SPICE -
  a. Declaration from the subscriber to the memorandum.
  b. Proof of residential address of Director and nominee.
  c. Identity proof of Director and nominee
  d. PAN card of Director and nominee.
  e. Proof of office address
  f. Copy of utility bills.
 g. Consent from nominee

Step 5 – Uploading Process
Visit official website of Ministry of Corporate affairs. 
Log in with a password and upload form SPICE along with SPICE Memorandum of Association and SPICE Article of Association.

Step 6 – Online Payment
After filing the documents online, the Next step is the payment of RoC fees and stamp duty electronically, which is based upon the Authorised Capital of the company.

Step 7 – Verification of Documents
Registrar of companies verifies all documents and forms and may suggest few changes to be made in the way of attachments.

Step 8 – Issue of Certificate of Incorporation by Registrar of Company

Once the form is approved, digitally signed ‘Certificate of Incorporation’ is sent to the directors through email. 



Benefits of OPC-

1. OPC is a legal entity, and it has a separate existence from its members.
2. Limited liability of a member
3. Encourage new entrepreneurs to set their own business.
4. The mandatory requirement of the appointment of a statutory auditor is not applicable.
5. The provision of Section 98, 100 to 111 related to holding general meetings and a minimum number of four board meetings every year under section 173 of Companies Act, 2013  shall not apply.
6. The financial statement does not include cash flow statements.
7. Director can also sign annual returns.
8. Provisions related to independent directors do not apply to OPC.

Restrictions - 

A. The member who is already the member or nominee of  1 One Person Company, cannot become a member or nominee in other One person company.
B. No minor shall become a member or nominee in One Person Company, and he/she is also not entitled to any gain from the company.
C. OPC cannot be converted into any company unless two years have expired from the date of incorporation.
D. One Person Company cannot carry out Non-Banking Financial Investment Activities.


Sections related to OPC

A. One Person Company means a company that has only one member. (section 2 (62)).
B. One person may form a company by subscribing to his/her name to a memorandum.(Section 3 (1)(c)). A natural person who is an Indian citizen and resident in India shall be eligible to incorporate a One Person Company; shall be a nominee for the sole member of a One Person Company.
C. Cash Flow statement is not mandatory for One Person Company. (Section 2 (40))
D. Annual Return shall be signed by the Company Secretary or where there is no Company Secretary, by the Directors of the Company. (Section 92)
E. It is not compulsory to call the Annual General Meeting. (Section 96)
F. The provisions of( Section 174) (Quorum for meetings of Board) will not apply to One Person Company in which there is only one director on its Board of Directors.
G. An individual who is a member shall be deemed as the first director until the members duly appoint the Director or directors according to the Provisions of the Act. (Section 152)
H. Where the company has only one director, all the businesses to be transacted at the meeting of the Board shall be entered into minutes book maintained under (section 118)
I. Such a Company cannot be incorporated or converted into a company under (section 8) of the Act (Charitable Objects).

Conclusion - 

The concept of One Person Company is fruitful for both regulators and market players. OPC encourages entrepreneurship. However, this concept is criticized based on the tax burden. However, this concept is regarded as unuseful in India because India already has the Limited Liability Partnership Act,2008, which limits the liability of members of the partnership.

Although One Person Company has a few disadvantages, the Indian Version of One Person Company is very sound and complete.



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These articles are provided freely as general guides. Do not rely on information provided here without seeking expericed legal advice first. If in doubt, please always consult a lawyer.


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