What is a one person company?


Section 2(62) defines a one person company (OPC) under the Companies Act, 2013 which has only one person as its members. The one person company has only one shareholder which is considered to be a single member of the company. Now the question arises when do such companies are created and that too with only one member? This happens only when there is only one founder or promotor of the business. OPC is a company that can be contrasted with private companies as well. The members of the company are only subscribers to MOA, which is a memorandum of association.

The one person company gets all the benefits and has access to bank loans, credit cards, legal protection and limited liability. According to the Ministry of Corporate Affairs, there are 34,235 one person companies out of 1.3 million total companies in India. There are many entrepreneurs whose business come up in early stages create one person companies rather than sole proprietorships.  This is because one person has several advantages. A single person could not incorporate a company before the commencement of Companies Act, 2013. After these companies act, a single person can establish a company.

But still everyone would choose proprietorship as for that minimum 2 members and directors are needed. As per Section 62(A) as discussed previously, now a company can be formed with only one member and director. In a one person company, the compliance requirements are lesser than other companies. The director and member are the same person, not different. Thus,  it can be said any one individual whether resident or NRI can incorporate their own business which will be having the company features and proprietorships business. 


The concept of one person company (OPC) has been legally recognised in the UK first and then in UK, China, Pakistan and continues. The induction of one person company was done by Dr J.J Irani Committee. This will help in the escalation of entrepreneurs in the market place and contribute to the work life. The OPC seems to be very simple and attractive at a very superficial level but it has to deal with imperfections like impositions and restrictions. The company might be good but has very slow progress. Thus resulting in the slow progress, it can be perceived that the thing has discouraged the entrepreneurs and incorporated one person company.

There has been relaxation of Companies Act, 2013 and Income Act, 1961 and its provisions reassure the entrepreneurs’ faith. This falls in the whole concept of OPCs. 

Formation of One Person Company

Any individual or person can form an OPC that is One Person Company by subscribing his or her name to MoA that is Memorandum of Association. The other requirements which are prescribed by the Companies Act, 2013 must also be fulfilled for the formation of one person company. The nominee details should be shared by the memorandum who will become the sole member or only member of the company in the future. This will happen only if the original member dies or is incapable of signing contracts or entering into contractual relations. This happens mostly if the member is of unsound mind or at that moment is not well. The consent of the nominee to his nomination and the memorandum has to be filed to the Registrar of Companies with a proper application of registration. The name can be withdrawn by the nominee at any point of time after submission of requisite applications to the registrar office. At another point, the member can also cancel his nomination if he wishes to do so. 

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

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We are also running a series Inspirational Women from January 2021 to March 31,2021, featuring around 1000 stories about Indian Women, who changed the world. #choosetochallenge

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