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A One Person Company is a company in every respect that matters for compliance. It has a single member, a mandatory nominee and a simplified annual return, but it appoints an auditor, maintains books of account, files financial statements with the Registrar, and answers to the same Act as any private limited company.
That is the point founders most often miss. The OPC was designed to give a sole entrepreneur limited liability and a corporate identity — things a proprietorship cannot offer. It was not designed to be a proprietorship with a better name. The reliefs it carries are real but narrow: no annual general meeting, an abridged annual return, no cash flow statement, and a single signature on the financial statements.
N D Savla & Associates handles One Person Company annual compliance for founders across Mumbai, Navi Mumbai, Thane and Goa. We run the full statutory calendar — auditor appointment, AOC-4, MGT-7A, director KYC and nominee filings — and advise on conversion when the structure stops fitting. Where an OPC is dormant rather than trading, we assess whether dormant status is the cheaper route.
What Is a One Person Company?
A One Person Company is defined in Section 2(62) of the Companies Act, 2013 as a company which has only one person as a member. It is a private company by classification under Section 3(1)(c), incorporated by one person, with a nominee named in the memorandum who becomes the member on the death or incapacity of the sole member.
Rule 3 of the Companies (Incorporation) Rules, 2014 sets the eligibility. Only a natural person may incorporate an OPC or be its nominee — a company or LLP cannot. Since 1 April 2021, the person may be a resident Indian citizen or a non-resident Indian, and the residency test is presence in India for at least 120 days during the immediately preceding financial year, reduced from 182 days by the Companies (Incorporation) Second Amendment Rules, 2021.
Restrictions apply. A person may incorporate only one OPC and may be the nominee of only one OPC. An OPC cannot be incorporated as or converted into a Section 8 company. It cannot carry out non-banking financial investment activities, including investment in the securities of any body corporate. And a minor cannot be a member or nominee, or hold a beneficial interest in the shares.
What Are the Annual Compliance Requirements for an OPC?
The annual calendar is shorter than a private limited company’s but not by as much as founders expect. The table below is the recurring set for a financial year ending 31 March.
| Compliance | Form | Due date | Basis |
|---|
| Financial statements filed with ROC | AOC-4 | Within 180 days from close of financial year | Section 137(1) proviso |
| Abridged annual return | MGT-7A | Within 60 days from completion of financial year | Section 92 with Rule 11 |
| Auditor appointment reported | ADT-1 | Within 15 days of the appointment | Section 139 with Rule 4 |
| Director KYC | DIR-3 KYC | By 30 September each year | Rule 12A |
| Income tax return | ITR-6 | As per Income-tax Act due dates | Income-tax Act, 1961 |
| Board meetings | — | One in each half of the calendar year, minimum gap 90 days | Section 173(5) |
| Statutory audit | — | Annually, regardless of turnover | Section 139 |
The statutory audit applies from the first year, whatever the turnover. An OPC with nil revenue still appoints an auditor within 30 days of incorporation and still has its accounts audited. This is the single largest difference in running cost between an OPC and a proprietorship, and it is not optional.
What Reliefs Does an OPC Actually Get?
The concessions are specific and worth knowing precisely, because founders frequently assume a broader exemption than exists.
- No annual general meeting is required — the first proviso to Section 96(1) exempts an OPC entirely
- Where there is only one director, Section 122(3) allows a resolution to be entered in the minutes book, signed and dated by the member, and that date is deemed to be the date of the meeting
- The abridged annual return in MGT-7A applies instead of the full MGT-7
- A cash flow statement is not required as part of the financial statements, under the proviso to Section 2(40)
- The financial statements may be signed by one director alone, under the proviso to Section 134(1)
- The board report is limited to explanations or comments on qualifications and adverse remarks in the auditor’s report, under the proviso to Section 134(4)
- Only one board meeting in each half of the calendar year is required, with a minimum gap of 90 days
What is not relieved: statutory audit, auditor appointment and ADT-1, AOC-4, maintenance of books and statutory registers, director KYC, and the commencement of business declaration in INC-20A for OPCs incorporated on or after 2 November 2018.
How Did the One Person Company Come Into Indian Law?
The OPC is one of the genuinely new ideas in the Companies Act, 2013, and its history is short but eventful — introduced in 2013, largely underused for eight years, and substantially reformed in 2021.
Before 2013, an Indian entrepreneur operating alone had no limited liability vehicle. The choice was a sole proprietorship, in which the individual and the business were legally the same person and personal assets stood behind every business obligation, or the artificial arrangement of a private limited company with a second shareholder holding a single share — usually a spouse or parent — purely to satisfy the two-member minimum. The second arrangement was extremely common and legally uncomfortable, since the nominal shareholder held rights the parties did not intend them to have.
The Expert Committee on Company Law chaired by Dr J J Irani, which reported in 2005, identified this gap and recommended a one-person corporate form. The Committee’s reasoning was that the growth of the services sector and of individual entrepreneurship had produced a large population of single-founder businesses that the existing law simply did not accommodate. The recommendation was carried into the Companies Bill and enacted as Section 2(62) of the Companies Act, 2013.
Uptake was slower than anticipated, and the reason was a design feature rather than a lack of interest. Rule 6 of the Companies (Incorporation) Rules, 2014 required an OPC to convert into a private or public company where its paid-up share capital exceeded fifty lakh rupees or its average annual turnover during the relevant period exceeded two crore rupees. A founder who expected the business to grow was therefore choosing a structure with a built-in expiry. The rules also required a two-year wait before voluntary conversion, and confined eligibility to resident Indian citizens — excluding the substantial population of NRI founders starting businesses in India.
The Union Budget presented in February 2021 announced a set of reforms to address exactly these constraints, and they were given effect by the Companies (Incorporation) Second Amendment Rules, 2021 with effect from 1 April 2021. The mandatory conversion thresholds were removed entirely, so an OPC may now grow without limit. The two-year waiting period for voluntary conversion was removed. Non-resident Indians were permitted to incorporate an OPC. And the residency requirement was reduced from 182 days to 120 days.
The effect was to convert the OPC from a starter structure with a ceiling into a viable long-term vehicle. Incorporations rose materially after the reform, and the structure is now a realistic alternative to a proprietorship for a single founder who wants limited liability, a corporate identity for contracting and credit, and a perpetual entity that survives the founder.
The 2021 reforms also changed the advice. Before them, a founder expecting growth was often steered towards a private limited company from the outset because the OPC would have to convert anyway. That reasoning no longer applies, and the choice now turns on genuine considerations — whether external investment is anticipated, and whether a second shareholder is likely.
How Do You Run OPC Compliance — Step by Step?
- Complete the post-incorporation set in the first months. Appoint the first auditor within 30 days of incorporation and file ADT-1 within 15 days of that board meeting. File INC-20A within 180 days of incorporation, and complete the registered office verification. These are the deadlines OPC founders miss most often, because they fall long before the first annual filing.
- Maintain books of account from day one. Section 128 requires books to be kept at the registered office on an accrual basis and a double entry system. An OPC that reconstructs its accounts at year end from bank statements will find the audit slower and more expensive than the bookkeeping would have been.
- Hold the board meetings and minute the resolutions. Where there are two or more directors, Section 173(5) requires one meeting in each half of the calendar year with a gap of not less than 90 days. Where there is a single director, the Section 122(3) route applies — the resolution is entered in the minutes book and signed and dated by the member. Keep the minutes book properly, because it is the only evidence that decisions were taken.
- Get the accounts audited. The auditor reports on the financial statements as for any company. The financial statements may be signed by one director under the proviso to Section 134(1), and no cash flow statement is required. The board report is confined to comments on the auditor’s qualifications and adverse remarks.
- File AOC-4 within 180 days of the financial year end. For a 31 March year end this falls on 27 September. The financial statements, auditor’s report and board report are attached. This is filed on the MCA portal at mca.gov.in, and the deadline differs from other companies precisely because there is no annual general meeting to anchor it.
- File MGT-7A within 60 days of the financial year end. The abridged annual return applies to OPCs and small companies and is materially shorter than the full MGT-7. Note that its window is shorter than the AOC-4 window, which surprises founders who assume the two are filed together.
- Complete DIR-3 KYC by 30 September. The sole director must file the annual KYC, and failure deactivates the Director Identification Number — which then prevents every other filing until reactivation. For a company with one director, a deactivated DIN stops all compliance, so this is disproportionately important in an OPC.
- Review the nominee annually. The nominee named in the memorandum becomes the member on the death of the sole member, and the whole continuity of the company rests on that one nomination. Marriage, estrangement, relocation or death of the nominee should all prompt a change, filed in Form INC-4 with fresh consent in INC-3. Very few OPCs revisit this after incorporation.
If the sole member is also the sole director, the company has a single point of failure at every level. The nominee arrangement addresses ownership on death, but not the practical position where the only director is incapacitated. Founders in this position should consider appointing a second director, which the OPC structure permits — an OPC may have up to fifteen directors.
When Should an OPC Convert — and to What?
Conversion is now entirely voluntary. The question is no longer whether the thresholds compel it, but whether the structure still fits.
Bringing in an investor or co-founder
An OPC has one member by definition. The moment a second shareholder is to be admitted, the company must convert to a private limited company under Section 18, with Form INC-6 and consequential changes to the memorandum and articles. Any funding round therefore requires conversion first, and building that step into the timetable avoids it becoming a closing condition discovered late.
Contracting and credit considerations
Some large customers and lenders remain unfamiliar with the OPC form and apply private limited company assumptions to it. This is a perception issue rather than a legal one, but where an OPC is repeatedly asked to explain its structure in tender or credit processes, conversion may be commercially simpler than continuing to explain.
Growth beyond a single founder’s capacity
An OPC can grow without limit since the 2021 amendment, but the governance structure remains built around one person. Where a business has developed a genuine management team, a board with independent participation and a broader shareholding usually serves better than a structure in which one individual holds every formal role.
When conversion is not needed
A consultant, professional practice, licensing business or single-founder trading company with no plan to admit shareholders has no reason to convert. Since 2021, an OPC in that position can operate indefinitely at any scale, and the annual compliance burden is lighter than a private limited company’s.
Why Choose N D Savla & Associates for OPC Compliance?
We run the calendar so you do not have to
AOC-4 at 180 days, MGT-7A at 60 days, DIR-3 KYC by 30 September and ADT-1 on appointment are four different clocks on one small company. We track them per entity and file them. Recurring statutory dates are published on our compliance calendar.
The first-year filings are handled, not assumed
Most OPC defaults we are asked to clean up date from the first six months — an unfiled INC-20A, a first auditor never appointed, an ADT-1 that nobody filed. We work from the date of incorporation rather than picking up at the first annual filing.
Audit and compliance in the same team
The statutory audit and the ROC filings sit together, so the figures in AOC-4 reconcile with the audited statements without a handover between firms. Bookkeeping can be handled by the same team where a founder would rather not maintain the records themselves.
Straight advice on conversion
Since the 2021 reforms removed the mandatory thresholds, conversion is a judgement call rather than a rule. We will tell you when your structure genuinely no longer fits, and equally when it still does and conversion would only add cost.
Six offices across Maharashtra and Goa
Andheri, Charni Road, Vashi, Thane, New Panvel and Panaji. A single-founder company has one person who can sign anything, and meeting that person where they are is what keeps filings on time.
Frequently Asked Questions on OPC Compliance
Does a One Person Company have to hold an annual general meeting?
No. The first proviso to Section 96(1) exempts a One Person Company from the requirement to hold an annual general meeting. Where the OPC has only one director, Section 122(3) provides that it is sufficient for the resolution to be communicated by the member to the company and entered in the minutes book, signed and dated by the member — that entry is deemed to be the date of the meeting. The exemption removes the meeting, not the record.
What is the due date for an OPC to file AOC-4?
A One Person Company files AOC-4 within 180 days from the close of the financial year, which for a year ending 31 March means 27 September. This differs from other companies, which file within 30 days of the annual general meeting — an OPC has no AGM, so the Act supplies a fixed period instead. MGT-7A, the abridged annual return, is filed within 60 days from the completion of the financial year.
Is an OPC still required to convert if it crosses the turnover limit?
No. The mandatory conversion thresholds — paid-up capital exceeding fifty lakh rupees or average annual turnover exceeding two crore rupees — were removed by the Companies (Incorporation) Second Amendment Rules, 2021 with effect from 1 April 2021. An OPC may now grow without any compulsion to convert. Voluntary conversion remains available at any time, and the earlier two-year waiting period before voluntary conversion was removed by the same amendment.
Can an NRI incorporate a One Person Company?
Yes, since 1 April 2021. The Companies (Incorporation) Second Amendment Rules, 2021 opened OPC incorporation to non-resident Indians and reduced the residency requirement for the member and nominee from 182 days to 120 days during the immediately preceding financial year. Before that amendment, only a resident Indian citizen could form an OPC, which excluded the NRI founder population entirely.
What happens to an OPC if the sole member dies?
The nominee named in the memorandum becomes the member. This is the central protective feature of the structure and the reason a nominee is mandatory at incorporation, consented to in Form INC-3. The nominee must then either continue as the member and appoint a fresh nominee, or decline. Because the entire continuity of the company rests on this one nomination, it should be reviewed whenever personal circumstances change, with any change filed in Form INC-4.
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