OPC is a one shareholder corporate entity. It can be incorporated with one Resident Promoter and one Director.

1. One Person Company
(OPC)

2. What is OPC?
• OPC is a one shareholder corporate entity, where
legal and financial liability is limited to the company
only.
• As per Rule 3(1) of the Companies (Incorporation)
Rules 2014, only a Natural Person who is an Indian
Citizen and resident in India shall be eligible to
Incorporation/form a OPC.

3. What are typical Solo Entrepreneur
characteristics?
• The desire for personal freedom that allows
them to adopt the lifestyle of choice.
• The drive and passion to implement the
business plan and to fulfill their personal
dreams.
• The willingness to go the extra mile and the
desire to succeed.
• Passionate about what they do and being
committed to their venture.

4. Requirements
• At Least 1 Resident Promoter: who will promote/
incorporate the company.
• At Least 1 Director: Director should be individual
only. No Body corporate/ HUF or Partnership Firm
can be appointed as Directors.
• Generally, Promoters and Directors are the same
in One Person Companies.
• Director must have DIN (Directors Identification
Number)
• Director must have Digital Signature

5. Benefits of OPC
• Its identity is distinct from that of its owner
• The personal assets of the shareholders and directors
remain protected in case of a credit default
• A range of small and medium enterprises, doing
business as sole proprietors, might enter into the
corporate domain
• Small single entrepreneurs currently operating under a
proprietorship model, move to the corporate structure
with benefits of limited liability
• As there is only one director in company, there is no
need to hold Board Meeting

6. Limitations of OPC
• Body Corporate / HUF or Partnership Firm can not be a
Director
• One person can make only one OPC
• Not easy to set up- it requires a lot of paperwork and is a
time-consuming process.
• The cost of establishment- you need to get a lawyer or
company secretary to help you draft the memorandum and
articles of association.
• The company will be taxed at 30%, which may be higher
than the 10-30% for a business that is not incorporated.
Other types of taxes, such as the minimum alternate tax
and dividend distribution tax, may also be applicable.

7. Steps of Incorporation
• Apply DIN/ DSC
• Selection of name
• Nomination by member
• Drafting of Memorandum and Articles of
Association.
• Stamping, digitally signing and e-filing of various
documents with the Registrar.
• Payment of fees
• Obtaining Certificate of Incorporation

8. ThankYou
Author: Alok Patnia
Alok Patnia, CEO of Taxmantra.com has been actively involved in the start-up sector of
India. He has been advising and mentoring a huge number of start-ups by providing
them with necessary hand holding with regards to various issues like Entity Structuring,
Funding, Tax and Regulatory compliances and allied issues. He is great insights on the
business starting-up and maintenance issues. He is a qualified Chartered Accountant
having post qualification exposure with Ernst and Young and KPMG at Bangalore.
For company incorporation and other compliance, visit taxmantra.com