OPC Registration — One Person Company

Under Section 3(1)(c) read with Section 2(62) of the Companies Act 2013, only a natural person who is an Indian citizen and resident in India (i.e., present in India for at least 182 days in the preceding calendar year) is eligible to incorporate and be the sole member of a One Person Company. A person cannot be the member of more than one OPC simultaneously, as stipulated in Rule 3 of the Companies (Incorporation) Rules 2014. The nominee — who steps in as member on the death or incapacity of the sole member — must also be a natural person, an Indian citizen, and a resident, and must give prior written consent in Form INC-3. A minor cannot be a nominee for an OPC under Rule 3(3) of the Companies (Incorporation) Rules 2014.

Under Rule 6(1) of the Companies (Incorporation) Rules 2014, an OPC is required to mandatorily convert into a Private or Public Limited Company if its paid-up share capital exceeds ₹50 lakh or its average annual turnover during the relevant period exceeds ₹2 crore. The OPC must file Form INC-5 with the Registrar of Companies within 60 days of the threshold being exceeded and simultaneously alter its Memorandum and Articles to reflect the new company type. Failure to convert within the prescribed period renders the company in default under Section 3(1) of the Companies Act 2013 and attracts penalties under Section 450. An OPC may also voluntarily convert into a Private Limited Company after two years from its date of incorporation under the proviso to Rule 6(2) by filing Form INC-6.

No. Section 122(1) of the Companies Act 2013 explicitly exempts a One Person Company from the requirement to hold an Annual General Meeting. Any business that would otherwise be transacted at an AGM — adoption of financial statements, declaration of dividend, appointment of auditors — may be entered into the minutes book of the OPC and signed and dated by the sole member, and is treated as passed on that date. However, the OPC must still file annual financial statements in Form AOC-4 and an Annual Return in Form MGT-7A (applicable to OPCs and small companies as per Rule 11A of the Companies (Management and Administration) Rules 2014) with the Registrar of Companies within the prescribed time limits — 180 days from the closure of the financial year for financial statements under Section 137(1).

A One Person Company is a company for all purposes of the Income Tax Act 1961 and is taxed at the same rates as a domestic company. For AY 2026-27, the base tax rate is 22% under Section 115BAA (concessional regime, no exemptions) or 25% under Section 115BA for small manufacturing companies set up after March 1, 2016, or 30% under the regular regime, all plus applicable surcharge and 4% health and education cess. There is no separate tax rate or exemption for OPCs — the choice of tax regime must be exercised each year (or is irrevocable once certain elections are made). The OPC is also liable for Minimum Alternate Tax under Section 115JB at 15% of book profits if it is under the regular tax regime and its computed tax is lower than 15% of book profits.

An OPC is a private company under Section 2(68) of the Companies Act 2013 and therefore cannot invite the public to subscribe to its securities or accept deposits from the public. It can accept deposits from its member (i.e., the sole member) subject to the limits and conditions applicable to private companies under the Companies (Acceptance of Deposits) Rules 2014. For equity funding, an OPC can issue shares only in a private placement under Section 42 of the Companies Act 2013 by passing a resolution and filing Form PAS-4 and PAS-5; however, since it can have only one member, equity investment from a VC or angel requires mandatory conversion to a Private Limited Company first, making OPC structurally unsuitable for external equity funding rounds.