One Person Company (OPC) Registration in India: Eligibility, Process, Cost and Compliance (2026)
- An OPC gives a solo founder limited liability and a separate legal entity with one member and one nominee; only a resident Indian individual can form one, and only one OPC each.
- OPCs skip the AGM and can hold just two board meetings a year, but they still need a statutory audit and annual MCA filings (AOC-4 within 180 days of year-end, MGT-7A).
- At modest profits an OPC can pay more tax than a proprietorship once dividend tax is counted — the decision is about liability and credibility, not tax.
A One Person Company (OPC) is a private limited company with a single shareholder. It was introduced by the Companies Act, 2013 so that a solo founder could get limited liability, a separate legal identity and a corporate name without finding a second shareholder. In 2026 it remains the cleanest structure for consultants, small traders and solo product founders who want to invoice as a company and keep personal assets separate — provided they understand the nominee rule, the tax arithmetic and the fact that “lighter compliance” does not mean “no compliance”.
Who can form an OPC
- Only a natural person who is an Indian citizen and resident in India (stayed in India for at least 120 days in the preceding financial year). Since 2021, NRIs who meet the 120-day test can also incorporate one.
- One person can be a member of only one OPC and a nominee in only one OPC at a time.
- A minor cannot be a member or nominee.
- An OPC cannot carry on non-banking financial activities, including investing in securities of other companies.
- It cannot be converted into a Section 8 (non-profit) company.
The nominee: the rule most people get wrong
Because the company has a single member, the law requires a nominee who becomes the member if the sole member dies or becomes incapacitated. The nominee's written consent is filed in Form INC-3 along with the incorporation application. The nominee can withdraw consent later, and the member can change the nominee at any time by filing INC-4. Pick someone who would actually want to run or wind up the business — a spouse or adult child usually — not a convenient friend who may refuse later.
Step-by-step registration
- DSC for the member (who is normally also the director).
- SPICe+ Part A: reserve the name. The name must end with “(OPC) Private Limited”.
- SPICe+ Part B with e-MOA (INC-33), e-AOA (INC-34), INC-3 nominee consent, identity and address proof of member and nominee, registered office proof (utility bill not older than two months plus NOC from the owner), and the AGILE-PRO-S form for GST, EPFO, ESIC, professional tax and bank account where applicable.
- DIN is allotted to the director inside the form; PAN and TAN are issued with the Certificate of Incorporation.
- File INC-20A (commencement of business) within 180 days after depositing the subscription money in the company's bank account.
Typical time from DSC to certificate is 7–12 working days if documents are clean. The government-side cost is the same as any private limited company: MCA form fee nil up to ₹15 lakh authorised capital, plus stamp duty for your state, ₹1,000 for the name and ₹131 for PAN and TAN. If you want the filing done for you, the OPC Registration package on KyaTax covers the forms, nominee consent and commencement filing.
OPC vs proprietorship: what actually changes
| Point | Proprietorship | One Person Company |
|---|---|---|
| Legal identity | Same as the owner | Separate legal person |
| Liability | Unlimited — personal assets exposed | Limited to unpaid share capital |
| Continuity | Ends with the owner | Continues through the nominee |
| Registration | None (only GST/Udyam as needed) | MCA incorporation, CIN, PAN, TAN |
| Audit | Only above tax-audit limits | Statutory audit every year |
| Tax rate | Individual slabs | 25% (turnover ≤ ₹400 crore) or 22% under section 115BAA, plus cess; dividends taxed again in the owner's hands |
| Raising outside equity | Not possible | Convert to a private limited company first |
Worked example: does an OPC save tax? Usually not at small profits
A consultant earns ₹15,00,000 net profit in FY 2026-27 and wants to take all of it home.
- As a proprietor under the new regime: tax on ₹15 lakh ≈ ₹1,05,000 plus 4% cess = ≈ ₹1,09,200 (no section 87A rebate above ₹12 lakh).
- As an OPC paying no salary: corporate tax at 25% plus 4% cess on ₹15 lakh = ₹3,90,000; the remaining ₹11,10,000 paid as dividend is taxed again at the owner's slab.
- As an OPC paying the owner a salary of ₹12,00,000: the salary is deductible, corporate profit falls to ₹3,00,000 (tax ≈ ₹78,000), and the salary is taxed in the owner's hands at slab rates — close to the proprietor's number but with an extra audit and filing layer.
The lesson: choose an OPC for limited liability, a corporate name and continuity — not for a tax saving. Plan director remuneration properly so the corporate tax layer does not become a double-tax trap.
Annual compliance an OPC must still do
- Statutory audit by a Chartered Accountant, every year, regardless of turnover.
- AOC-4 (financial statements) within 180 days of the financial year end — 27 September for a 31 March year-end. No AGM is required, so there is no AGM-based deadline.
- MGT-7A (abridged annual return) within 60 days of the date on which the AGM would have been due.
- Income-tax return by 31 October (audit case), advance tax in four instalments if liability exceeds ₹10,000.
- At least one board meeting in each half of the calendar year with a gap of at least 90 days if there is more than one director; a sole director simply records resolutions in the minute book.
- DIR-3 KYC for the director every year by 30 September.
Common mistakes
- Forgetting INC-20A. Without the commencement filing the company cannot legally start business or borrow, and the penalty is ₹50,000 on the company plus ₹1,000 per day on the director.
- Treating the nominee as a formality. A nominee who later withdraws forces an INC-4 filing; a nominee who is unaware creates a mess on the member's death.
- Drawing profits as “withdrawals”. Money taken out of an OPC without a salary or dividend resolution is a loan to a director — restricted under section 185 and a red flag in audit.
- Trying to add a co-founder. An OPC cannot have a second shareholder. Convert to a private limited company (INC-6) before issuing shares to anyone else.
- Missing the 180-day AOC-4 window because there is no AGM reminder — set the date the day you close the books.
Do it yourself in minutes — free to try, no login needed.
Open OPC Registration →Frequently asked questions
Can an NRI register a One Person Company?
Yes, since 2021 an Indian citizen who is resident in India for at least 120 days in the preceding financial year can incorporate an OPC, which brings many NRIs within scope.
Is an OPC required to get its accounts audited?
Yes. An OPC is a company under the Companies Act, so a statutory audit by a Chartered Accountant is mandatory every year irrespective of turnover.
When must an OPC convert into a private limited company?
Since April 2021 there is no mandatory conversion threshold. Conversion is voluntary and is done whenever the owner wants a second shareholder or outside investment, by filing INC-6.
Does an OPC need to hold an AGM?
No. OPCs are exempt from holding an annual general meeting. Financial statements are filed in AOC-4 within 180 days of the financial year end and the annual return in MGT-7A.
General information for FY 2026-27, not professional advice for your specific case. Rules change — verify against the latest notification or ask a KyaTax expert.
Related: All free tools · More guides · Virtual CFO