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Start up entity - One Person Company

Published: 21 Jan 2018

One Person Company (OPC) is a recent corporate entity in India.

OPC has been introduced under the Companies Act, 2013. As the name of the entity suggests, the law now allows even a single shareholder to incorporate a private limited company with only one director unlike the old requirement of minimum two shareholders and two directors.

This option provides a more systematic, stable and independent structure to a single entrepreneur’s business without the need to find another shareholder and director. An OPC being a separate and independent legal entity, is required to ensure compliance with various provisions of the Companies Act, 2013 as well as other regulatory and tax laws. However, the requirements are simpler than those applicable to conventional companies incorporated under earlier laws.

The incorporation and winding up process, time frame and associated costs for an OPC somewhat similar to other companies.

Therefore, an OPC model may suit a single entrepreneur who wants to adopt a systematic and organised approach to her business. However, again this structure too is fraught with formalities and compliances and should not be taken lightly. There is no scope for trial with a new structure. 

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About the author :

Bhumesh Verma is a Corporate Lawyer with over 2 decades of experience in advising domestic and international clients, with a place in "The A-List - India's Top 100 Lawyers" by India Business Law Journal. He keeps writing frequently on FDI, M&A and other corporate matters. He can be reached at bhumesh.verma@corpcommlegal.com.

Bhumesh Verma

Firm: Corp Comm Legal
Country: India

Practice Area: Contract

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