Q.What is a One Person Company (OPC)?

The OPC is one of the newer categories introduced by the Companies Act, 2013, aimed at individual entrepreneurs.

A One Person Company (OPC) is defined under Section 2(62) of the Companies Act, 2013 as a company which has only one person as its member. Under Section 3(1)(c), a single individual can form an OPC for any lawful purpose, provided that the memorandum names a nominee — another individual who has given written consent — who will become the member of the company if the original member dies or becomes incapable of entering into a contract. The OPC form was introduced specifically to let a sole entrepreneur enjoy the advantages of a separate legal entity and limited liability, which earlier company law made available only where there were two or more members. An OPC cannot itself invite the public to subscribe to its securities, and it must convert to a private (or, in certain circumstances, public) company if it needs to admit a second member.

Students sometimes wrongly describe the OPC as "a kind of sole proprietorship" — an OPC is a fully incorporated company with a separate legal identity and limited liability, which a sole proprietorship (having no separate legal existence from its owner) is not.