# One Person Company (OPC) - Section 2(62)

## Definition

An OPC is a company which has only one person as a member.

It is essentially a private company with some unique features.
Its name must carry the words 'One Person Company' or 'OPC' in brackets below the name wherever the name is printed, affixed, or engraved.

## Why Was OPC Introduced? (Logic & Advantages)

To encourage unorganized proprietorship to enter the organized corporate world.
Recommended by the J.J. Irani Committee.
Concept already exists in China, Pakistan, Singapore, USA.
Earlier in India, to form a private company you needed 2 shareholders, often forcing the entrepreneur to rope in a token second shareholder who could later misuse his position.

## Relaxations Available to OPC

#	Relaxation
a	Only one director is sufficient (vs. minimum 2 in private company)
b	No requirement to hold AGM
c	Directors' report content significantly reduced
d	Annual return: signed by company secretary; if no CS, then by director (in other companies it is director + CS, or PCS if no CS)
e	Board meetings: not required if only 1 director. If >1 director, at least 1 meeting per half of calendar year, with gap not less than 90 days between two meetings
f	Cash Flow Statement NOT required

## Who Can Form an OPC?

Only a natural person who is:

NOT a minor, AND
An Indian citizen, AND
Whether resident in India or otherwise

### Definition of 'Resident in India'

A person who has stayed in India for not less than 120 days during the immediately preceding financial year.

## The Nominee Concept

### Why a Nominee?

To ensure perpetual succession of the OPC - if the sole member dies or becomes incapacitated, the nominee becomes the member.

### Nominee Requirements

Must be a natural person, NOT a minor.
Must be an Indian citizen, resident or otherwise.
Prior written consent in Form INC-3 is required.
Name of nominee filed in Form INC-32 (SPICe) with the Registrar at incorporation.

### Nominee Rules

1. A person who is already a member of an OPC and becomes nominee of another OPC must comply with the one-OPC rule within 180 days.

2. Withdrawal of consent by nominee: Nominee gives notice in writing to the sole member and the OPC. Member must nominate another within 15 days of receipt of withdrawal notice.

3. Change of nominee by member: Allowed any time for any reason (including death/incapacity of nominee). Member must obtain prior consent of new nominee in Form INC-3 and intimate the company.

4. Change in nominee name is NOT an alteration of memorandum.

## Visual Summary - OPC Lifecycle

```

Formation: 1 Indian citizen (natural person, not minor)

Memorandum: Names sole member + NOMINEE (Form INC-3)

Filed: Form INC-32 (SPICe) at incorporation

Nominee may withdraw OR member may change nominee

On member's death/incapacity: NOMINEE becomes member

--> ensures PERPETUAL SUCCESSION

```

## Summary Table

Feature	OPC
Type	Private company variant
Members	Exactly 1
Directors	Minimum 1
AGM	Not required
Cash flow statement	Not required
Nominee	Mandatory (Form INC-3)
Name suffix	'One Person Company' or 'OPC' in brackets
Eligible person	Natural person, Indian citizen, not minor

Worked example

### Example 1

Q: Mr. A, an Indian citizen who stayed in India for 100 days in the immediately preceding financial year, wants to form an OPC. Can he?

A: Mr. A is an Indian citizen and a natural person (not minor), so he is eligible to form an OPC. The 120-day residency requirement determines whether he is treated as 'resident' - but eligibility extends to citizens whether resident or otherwise. So yes, he can form the OPC (subject to current MCA notifications).

### Example 2

Q: Mr. P is a member of OPC-1. He is now invited to be nominee in OPC-2. Is there any issue?

A: Yes. A person can be associated with only one OPC as member. If Mr. P becomes a nominee in OPC-2 and later becomes its member (e.g., by virtue of becoming nominee on the original member's death), he must resolve this dual-OPC situation within 180 days.

### Example 3

Q: Mrs. X is the nominee of an OPC. She wants to withdraw. What is the procedure?

1. Mrs. X gives written notice to the sole member AND to the OPC.

2. The sole member must nominate another person within 15 days of receipt of the withdrawal notice.

3. New nominee's consent obtained in Form INC-3.

4. Intimation of new nomination sent to the company in writing.

⚠️ Common exam mistakes

Saying a minor can be a nominee or a member of an OPC - minors are disqualified for both.
Saying foreigners can form OPCs - only Indian citizens can (resident or otherwise).
Treating change of nominee as an alteration of memorandum - it is NOT.
Confusing the 120-day residency rule with eligibility - residency is just a definition; an Indian citizen can form an OPC even if not resident.
Saying OPC must hold AGM - it is EXEMPTED from AGM requirements.
Forgetting OPC must prepare a Cash Flow Statement - it is NOT required to.
Stating OPC needs at least 2 directors - 1 director is sufficient.

Bare-Act text Section 2(62) · Companies Act, 2013 · click to expand

'One Person Company' means a company which has only one person as a member.

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