Short Answer
A One Person Company is a private company with a single member. Section 2(62) of the Companies Act, 2013 defines "One Person Company" as a company which has only one person as a member, and Section 3(1)(c) allows a company to be formed by one person where it is to be a One Person Company — that is, a private company. (Companies Act, 2013, Section 2(62); Section 3(1)(c)) [1]
Registration itself follows the same route as any other company: a memorandum and articles are filed with the Registrar under Section 7, together with the required declarations, and the company comes into existence on the date of the certificate of incorporation. (Companies Act, 2013, Section 7; Section 9) [2]
The route is then narrowed by the Companies (Incorporation) Rules, 2014, which fix who may incorporate an OPC, what the OPC may not do, and how the nominee is recorded. (Companies (Incorporation) Rules, 2014, Rule 3; Rule 4) [3]
Who May Form an OPC
Only a natural person who is an Indian citizen and resident in India is eligible to incorporate a One Person Company, or to be the nominee for its sole member. (Companies (Incorporation) Rules, 2014, Rule 3(1)) [4]
"Resident in India" is defined for this purpose as a person who has stayed in India for not less than 182 days during the immediately preceding one calendar year. (Companies (Incorporation) Rules, 2014, Rule 3(1)) [5]
No person is eligible to incorporate more than one OPC, or to be a nominee in more than one such company; if that limit is crossed through a nomination, the eligibility criteria must be met within 180 days. (Companies (Incorporation) Rules, 2014, Rule 3(2) and 3(3)) [6]
No minor may become a member or nominee of an OPC, or hold shares in it with beneficial interest. (Companies (Incorporation) Rules, 2014, Rule 3(4)) [7]
What an OPC May Not Do
An OPC cannot be incorporated or converted into a Section 8 company. (Companies (Incorporation) Rules, 2014, Rule 3(5)) [8]
An OPC cannot carry out non-banking financial investment activities, including investment in securities of any body corporate. (Companies (Incorporation) Rules, 2014, Rule 3(6)) [9]
These are the two hard limits in the rule. Both are conditions of the OPC form itself rather than optional cautions. (Companies (Incorporation) Rules, 2014, Rule 3) [10]
The Nominee — the OPC's Distinctive Requirement
The first proviso to Section 3(1)(c) requires the memorandum of a One Person Company to indicate the name of the other person, with that person's prior written consent in the prescribed form, who shall become the member of the company in the event of the subscriber's death or incapacity to contract. (Companies Act, 2013, Section 3(1)(c)) [11]
Rule 4 of the Companies (Incorporation) Rules, 2014 implements that provision: the subscriber must nominate a person after obtaining that person's prior written consent, and the nomination is made in Form No. INC.2 with the nominee's consent in Form No. INC.3, filed with the Registrar at the time of incorporation along with the memorandum and articles and the prescribed fee. (Companies (Incorporation) Rules, 2014, Rule 4(1) and 4(2)) [12]
A nominee may withdraw consent by written notice to the sole member and the company, and the sole member must nominate another person within fifteen days of receiving that notice, with the new nominee's consent in Form No. INC.3. (Companies (Incorporation) Rules, 2014, Rule 4(3)) [13]
The company must then file notice of the withdrawal and the new nomination with the Registrar in Form No. INC.4 within thirty days, with the fee prescribed under the Companies (Registration Offices and Fees) Rules, 2014. (Companies (Incorporation) Rules, 2014, Rule 4(4); Companies (Registration Offices and Fees) Rules, 2014, Rule 2(1)(d)) [14]
The member may also change the nominee at any time by written intimation to the company, again with the new nominee's prior consent in Form No. INC.3, and the change is filed in Form No. INC.4 within thirty days of the intimation. (Companies (Incorporation) Rules, 2014, Rule 4(5)) [15]
A change in the name of the nominee is not treated as an alteration of the memorandum, though the company must intimate the change to the Registrar in the prescribed time and manner. (Companies Act, 2013, Section 3(1)(c); Companies (Incorporation) Rules, 2014, Rule 4) [16]
Board of Directors
Section 149(1)(a) fixes the minimum number of directors: three in a public company, two in a private company and one in a One Person Company. The maximum is fifteen, subject to a special resolution to exceed it. (Companies Act, 2013, Section 149(1)) [17]
What Is Filed at Incorporation
Under Section 7(1), the memorandum and articles must be filed with the Registrar, duly signed by all subscribers; a declaration in the prescribed form must be given by an advocate, chartered accountant, cost accountant or company secretary in practice engaged in the formation and by a person named in the articles as a director, manager or secretary; and each subscriber and first director must give the prescribed declaration as to convictions and the accuracy of the documents filed. (Companies Act, 2013, Section 7(1)(a), 7(1)(b) and 7(1)(c)) [18]
Rule 13 of the Companies (Incorporation) Rules, 2014 prescribes how the memorandum and articles are to be signed — each subscriber signing in the presence of at least one witness who attests the signature — and Rule 11 allows a company to adopt the model articles in Table F, G, H, I and J of Schedule I to the Act. (Companies (Incorporation) Rules, 2014, Rule 13; Rule 11) [19]
The application for incorporation is filed with the Registrar having jurisdiction over the proposed registered office, with the fee prescribed under the Companies (Registration Offices and Fees) Rules, 2014. (Companies (Incorporation) Rules, 2014, Rule 12) [20]
The memorandum must state the company's name (ending in "Private Limited" for a private company), the State of the registered office, the objects, the liability of members and the authorised share capital where the company has share capital. (Companies Act, 2013, Section 4(1)) [21]
The articles must contain the regulations for the management of the company and any other matters prescribed. (Companies Act, 2013, Section 5) [22]
The current incorporation form numbers and the integrated electronic form set — including SPICe+ and the accompanying name-reservation, eMOA and eAOA forms — are set by MCA portal notification under Rule 12 of the Companies (Incorporation) Rules, 2014, not stated as fixed form numbers in this article; check the MCA portal before filing.
Registered Office and Commencement
Under Section 12, a company must have a registered office capable of receiving communications within thirty days of incorporation and at all times thereafter. (Companies Act, 2013, Section 12) [23]
Under Section 10A, a company incorporated after the commencement of the Companies (Amendment) Act, 2019 and having a share capital cannot commence business or exercise borrowing powers until a director files a declaration within one hundred and eighty days of incorporation that every subscriber has paid the value of the shares agreed to be taken, and until the registered-office verification under Section 12(2) has been filed. (Companies Act, 2013, Section 10A) [24]
The declaration at the time of commencement of business is prescribed by the Companies (Incorporation) Rules, 2014, which also prescribe the verification of the registered office. (Companies (Incorporation) Rules, 2014, Rule 24; Rule 25) [25]
How to Register Online
Registration is done through the MCA's electronic incorporation process. The Act and the rule-set held on disk establish what must be filed; the portal supplies the current electronic form and signing flow. (Companies (Incorporation) Rules, 2014, Rule 12; Companies Act, 2013, Section 7) [26]
One requirement is anchored in the rules: the application for a director's DIN is made in Form DIR-3, and Form DIR-3 must be signed and submitted electronically using the applicant's own Digital Signature Certificate. (Companies (Appointment and Qualification of Directors) Rules, 2014, Rule 9) [27]
The current MCA incorporation workflow — the SPICe+ form set, fee slabs, processing time and the portal's signing flow — is set by MCA portal notification, not by the Companies Act, 2013 or the rule-sets held on disk; check each step on the MCA portal before filing.
What the Act does fix is the legal outcome: once the Registrar registers the filed documents, the company exists from the date mentioned in the certificate of incorporation. (Companies Act, 2013, Section 9) [28]
Converting an OPC Later
An OPC may not convert voluntarily into any other kind of company unless two years have expired from its incorporation — except where its paid-up share capital is increased beyond fifty lakh rupees or its average annual turnover exceeds two crore rupees. (Companies (Incorporation) Rules, 2014, Rule 3(7)) [29]
Conversion becomes compulsory where the paid-up share capital exceeds fifty lakh rupees or the average annual turnover exceeds two crore rupees: the company ceases to be entitled to continue as an OPC and must convert itself, within six months, into either a private company with at least two members and two directors or a public company with at least seven members and three directors, in accordance with Section 18 of the Act. (Companies (Incorporation) Rules, 2014, Rule 6(1) and 6(2)) [30]
The OPC must give the Registrar notice in Form No. INC.5 within sixty days of the threshold applying, informing the Registrar that it has ceased to be an OPC and must convert. (Companies (Incorporation) Rules, 2014, Rule 6(4)) [31]
For the reverse direction, Rule 7 allows a private company other than a Section 8 company, with paid-up share capital of fifty lakh rupees or less or average annual turnover of two crore rupees or less, to convert into an OPC by special resolution, after obtaining no-objection in writing from members and creditors, filing the special resolution in Form No. MGT.14 within thirty days and applying for conversion in Form No. INC.6. (Companies (Incorporation) Rules, 2014, Rule 7(1), 7(2), 7(3) and 7(4)) [32]
Any company of one class registered under the Act may convert into a company of another class by altering its memorandum and articles, and the Registrar, on application and on being satisfied that the requirements have been complied with, closes the former registration and issues a certificate of incorporation. Conversion does not affect debts, liabilities, obligations or contracts incurred before conversion. (Companies Act, 2013, Section 18(1) and 18(3)) [33]
FAQ
Q1: What is the legal definition of a One Person Company?
Under Section 2(62) of the Companies Act, 2013, a One Person Company "means a company which has only one person as a member". (Companies Act, 2013, Section 2(62)) [34]
Q2: Who is eligible to incorporate an OPC?
Only a natural person who is an Indian citizen and resident in India — resident meaning a stay of not less than 182 days in the immediately preceding calendar year — and no person may incorporate more than one OPC or be nominee in more than one. (Companies (Incorporation) Rules, 2014, Rule 3(1) and 3(2)) [35]
Q3: How many directors must an OPC have?
At least one. Section 149(1)(a) prescribes a minimum of one director in the case of a One Person Company, against two for a private company and three for a public company. (Companies Act, 2013, Section 149(1)) [36]
Q4: What is the nominee requirement in an OPC?
The subscriber must nominate a person after obtaining that person's prior written consent, with the nomination made in Form No. INC.2 and the consent in Form No. INC.3, filed with the Registrar at incorporation along with the memorandum and articles. (Companies (Incorporation) Rules, 2014, Rule 4(1) and 4(2)) [37]
Q5: When must an OPC convert into another company?
Where the paid-up share capital exceeds fifty lakh rupees or the average annual turnover exceeds two crore rupees, the company ceases to be entitled to continue as an OPC and must convert itself within six months into a private or public company under Section 18 of the Act. (Companies (Incorporation) Rules, 2014, Rule 6(1) and 6(2); Companies Act, 2013, Section 18) [38]
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Internal links: See makeitlegit.in/start for entity selection guidance, and makeitlegit.in/tools/company-type-comparison to compare an OPC with a private limited company.
Primary source: Companies Act, 2013 — Sections 2(62), 2(68), 2(71), 3, 4, 5, 7, 9, 10A, 12, 18 and 149; Companies (Incorporation) Rules, 2014 — Rules 3, 4, 6, 7, 11, 12, 13, 24 and 25 (Companies Act, 2013, Sections 2(62), 2(68), 2(71), 3, 4, 5, 7, 9, 10A, 12, 18 and 149; Companies (Incorporation) Rules, 2014, Rules 3, 4, 6, 7, 11, 12, 13, 24 and 25).
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Sources
- Companies Act, 2013, Section 2(62) — Definition of One Person Company; Section 3(1)(c) — Formation of company
- Companies Act, 2013, Section 7 — Incorporation of company; Section 9 — Effect of registration
- Companies (Incorporation) Rules, 2014, Rule 3 — One Person Company; Rule 4 — Nomination by the subscriber or member of One Person Company
- Companies (Incorporation) Rules, 2014, Rule 3(1) — One Person Company
- Companies (Incorporation) Rules, 2014, Rule 3(1) — Explanation, One Person Company
- Companies (Incorporation) Rules, 2014, Rule 3(2) and 3(3) — One Person Company
- Companies (Incorporation) Rules, 2014, Rule 3(4) — One Person Company
- Companies (Incorporation) Rules, 2014, Rule 3(5) — One Person Company
- Companies (Incorporation) Rules, 2014, Rule 3(6) — One Person Company
- Companies (Incorporation) Rules, 2014, Rule 3 — One Person Company
- Companies Act, 2013, Section 3(1)(c) — Formation of company
- Companies (Incorporation) Rules, 2014, Rule 4(1) and 4(2) — Nomination by the subscriber or member of One Person Company
- Companies (Incorporation) Rules, 2014, Rule 4(3) — Nomination by the subscriber or member of One Person Company
- Companies (Incorporation) Rules, 2014, Rule 4(4) — Nomination by the subscriber or member of One Person Company; Companies (Registration Offices and Fees) Rules, 2014, Rule 2(1)(d) — Definitions: Fees
- Companies (Incorporation) Rules, 2014, Rule 4(5) — Nomination by the subscriber or member of One Person Company
- Companies Act, 2013, Section 3(1)(c) — Formation of company; Companies (Incorporation) Rules, 2014, Rule 4 — Nomination by the subscriber or member of One Person Company
- Companies Act, 2013, Section 149(1) — Company to have Board of Directors
- Companies Act, 2013, Section 7(1)(a), 7(1)(b) and 7(1)(c) — Incorporation of company
- Companies (Incorporation) Rules, 2014, Rule 13 — Signing of memorandum and articles; Rule 11 — Model articles
- Companies (Incorporation) Rules, 2014, Rule 12 — Application for incorporation of companies
- Companies Act, 2013, Section 4(1) — Memorandum
- Companies Act, 2013, Section 5 — Articles
- Companies Act, 2013, Section 12 — Registered office of company
- Companies Act, 2013, Section 10A — Commencement of business, etc.
- Companies (Incorporation) Rules, 2014, Rule 24 — Declaration at the time of commencement of business; Rule 25 — Verification of registered office
- Companies (Incorporation) Rules, 2014, Rule 12 — Application for incorporation of companies; Companies Act, 2013, Section 7 — Incorporation of company
- Companies (Appointment and Qualification of Directors) Rules, 2014, Rule 9 — Application for allotment of Director Identification Number
- Companies Act, 2013, Section 9 — Effect of registration
- Companies (Incorporation) Rules, 2014, Rule 3(7) — One Person Company
- Companies (Incorporation) Rules, 2014, Rule 6(1) and 6(2) — One Person Company to convert itself into a public company or a private company in certain cases
- Companies (Incorporation) Rules, 2014, Rule 6(4) — One Person Company to convert itself into a public company or a private company in certain cases
- Companies (Incorporation) Rules, 2014, Rule 7(1), 7(2), 7(3) and 7(4) — Conversion of private company into One Person Company
- Companies Act, 2013, Section 18(1) and 18(3) — Conversion of companies already registered
- Companies Act, 2013, Section 2(62) — Definition of One Person Company
- Companies (Incorporation) Rules, 2014, Rule 3(1) and 3(2) — One Person Company
- Companies Act, 2013, Section 149(1) — Company to have Board of Directors
- Companies (Incorporation) Rules, 2014, Rule 4(1) and 4(2) — Nomination by the subscriber or member of One Person Company
- Companies (Incorporation) Rules, 2014, Rule 6(1) and 6(2) — One Person Company to convert itself into a public company or a private company in certain cases; Companies Act, 2013, Section 18 — Conversion of companies already registered
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