One person company: limited liability for a founder working alone

• Only a natural person who is an Indian citizen, whether resident in India or not. Since April 2021 non-resident Indians qualify, and the residency test for a resident is 120 days in the previous financial year.
• A person can be the member of only one OPC at a time, and the nominee of only one.
• A minor cannot be a member or nominee, and a company or LLP cannot be the member.
• An OPC cannot carry on non-banking financial investment activities, and cannot be formed as or converted into a Section 8 company.

The 2021 amendments also removed the old ceilings of ₹50 lakh paid-up capital and ₹2 crore turnover that forced conversion, and the two-year wait before voluntary conversion. An OPC can now stay an OPC at any size, or convert to a private or public company whenever it chooses by adding members and filing Form INC-6.

The memorandum must name a nominee who becomes the member if the sole member dies or becomes incapable of contracting. The nominee gives written consent in Form INC-3, filed with the incorporation, can withdraw consent, and can be replaced by the member at any time by intimating the company and filing the change. Choose someone who would actually run or wind up the business; the nominee inherits control, not just shares.

The process is the same SPICe+ route as a private company, with one director and one subscriber: a Class 3 digital signature, the name in Part A ending with (OPC) Private Limited, Part B with the e-memorandum, e-articles, the nominee’s consent and the registered office proof, and PAN and TAN issued with the certificate. The MCA charges no fee for authorised capital up to ₹15 lakh; stamp duty follows the state. Seven to ten working days is typical. The steps are set out in our company registration guide.

Director KYC, DPT-3, MSME-1 and event-based filings apply as to any company.

An OPC is taxed as a domestic company: 22 percent under the concessional regime, 25.17 percent with surcharge and cess, with no slab benefit and no basic exemption. The founder’s salary as director is a deductible expense for the company and taxed in the founder’s hands at slab rates; dividends are taxed again when received. A proprietor, by contrast, pays slab rates on the whole profit, with nothing taxed twice, and can use presumptive taxation.

Below roughly ₹12 to ₹15 lakh of profit, the proprietorship is usually cheaper in tax and far cheaper in compliance. The OPC earns its cost through limited liability, a separate identity that customers and lenders take more seriously, and an easy path to a private company when a co-founder or investor arrives.

Choose a proprietorship if the risk is low, profits are modest and you want almost no filings. Choose an OPC if you are alone, the business carries contractual or liability risk, or customers want to deal with a company. Choose a private limited company from the start if a co-founder, an ESOP pool or outside investment is likely within a year or two: an OPC cannot have a second shareholder, so the first investor forces a conversion anyway. The three are compared in detail in our structure guide.