📘 What Are the Legal Requirements for a One Person Private Limited Company?

A One Person Company (OPC) is a unique business structure under the Companies Act, 2013, allowing a single individual to operate a corporate entity with limited liability. It offers the flexibility of a sole proprietorship with the benefits of a private limited company. However, operating an OPC comes with certain legal requirements and compliances that must be followed to remain in good standing with the law.

Below are the key legal requirements every OPC must fulfill in India.

🧾 1. Eligibility Criteria

• Only a natural person who is an Indian citizen and resident in India can form an OPC.
• A person can incorporate only one OPC at a time.
• An OPC cannot carry out Non-Banking Financial Investment (NBFC) activities or invest in securities of other companies.

📝 2. Incorporation Requirements

• Director: At least one director is mandatory (maximum of 15 allowed).
• Nominee: A nominee must be appointed during incorporation, who will take charge in case of the sole member’s death or incapacity.
• Digital Signature Certificate (DSC) and Director Identification Number (DIN) are required for the director.

🏢 3. Registered Office

• OPC must have a registered office in India.
• Address proof, utility bills, and NOC from the owner (if rented) must be submitted during registration.

📑 4. Mandatory Compliances

Once incorporated, an OPC is subject to several ongoing legal and financial compliance requirements:

📘 a. Annual Filings:

• Form AOC-4: Filing of Financial Statements.
• Form MGT-7A: Filing of Annual Return.

💼 b. Income Tax Returns:

• Must file ITR-6 annually, regardless of turnover.

🧾 c. Auditor Appointment:

• Auditor must be appointed within 30 days of incorporation (if applicable).

💳 5. Financial and Statutory Records

• Maintain books of accounts as per prescribed accounting standards.
• Keep records of board resolutions, financial transactions, and statutory registers.

💰 6. Taxation & GST

• OPCs are taxed at a flat rate of 25% if turnover is below ₹400 crore (as per applicable Finance Act).
• GST registration is mandatory if turnover exceeds ₹40 lakh (₹20 lakh for services in most states).

🔄 7. Conversion Rules

• An OPC must be converted into a private or public limited company if:

  • Paid-up capital exceeds ₹50 lakh, or
  • Annual turnover exceeds ₹2 crore for three consecutive years.

✅ Conclusion

Starting and maintaining a One Person Private Limited Company offers many benefits, but it requires adherence to legal and regulatory norms. Staying compliant ensures smooth operations and avoids penalties or legal challenges.