One Person Company

First published on Lawyered.in

Introduction

One Person Company ("OPC") has been conceptualized by the Ministry of Corporate Affairs ("MCA") to help fill-in the gap between a proprietorship and a private company set-up and was introduced in India through the Companies Act, 2013 ("Act"). This type of entity encourages an individual to start his own business, especially an individual who has low risk capacity and such a structure is ideal to set up a small enterprise. Moreover, there are minimum compliance requirements for incorporating an OPC and, if required, OPC can easily get converted in to any other form of company. Section 2(62) of the Act defines OPC as a company which has only 1 (one) person as a member. It gives the said single member, full control over the company by permitting him to be the only director and shareholder. OPC is treated as a separate legal entity from its member and the requirement to raise equity fund or offer employee stock options