Chartered Accountant
Company Secretary
In India, a single-person company typically refers to either a sole proprietorship or a One Person Company (OPC), depending on an individual’s legal structure. A sole proprietorship is an informal business owned and operated by one person with no separate legal identity.
At the same time, an OPC is a formal entity introduced under the Companies Act 2013, allowing a single individual to establish a company with limited liability. This section explores both options, with a deeper focus on OPC registration, as it aligns with the concept of a “single company” under Indian corporate law.
For a “single company” in India, the OPC is the formal choice under the Ministry of Corporate Affairs (MCA). At the same time, sole proprietorships operate under more straightforward regulations. The choice depends on liability, scale, and willingness to comply.
For a sole proprietorship, registration isn’t mandatory. Still, it is practical for tax compliance (e.g., GST registration) and credibility (e.g., opening a business bank account). For an OPC, registration is a legal requirement under the Companies Act, offering benefits like:
Both structures enable tax filings and access to government schemes. Still, an OPC provides a corporate shield that a proprietorship lacks.
While not a “company” legally, a sole proprietorship is an everyday single-person business. The process is:
This process is informal, often completed in days, and suits small businesses with low risk.
An OPC is a formal company under the MCA; its registration is more structured. Here’s the step-by-step process as of March 20, 2025:
1.Obtain a Digital Signature Certificate (DSC):
2.Apply for a Director Identification Number (DIN):
3.Select and Reserve a Company Name:
4.Prepare Legal Documents:
5.File Incorporation Application (SPICe+):
6.Receive Certificate of Incorporation:
A One Person Company (OPC) is a business structure that allows a single individual to own and run a company. Unlike a sole proprietorship, an OPC is considered a separate legal entity, which means it provides limited liability protection to the owner. It’s a great option for solo entrepreneurs who want the benefits of limited liability without the complexity of a larger company.
The main difference is that an OPC is a separate legal entity from its owner, offering limited liability protection. In a sole proprietorship, the business and the owner are the same, meaning the owner is personally responsible for any debts or liabilities. OPCs, however, provide the owner with more protection and credibility while maintaining control over the business.
To register an OPC, you need to:
Get a Digital Signature Certificate (DSC).
Apply for a Director Identification Number (DIN).
Choose a unique company name and get approval.
Draft the required documents, like the Memorandum of Association (MOA).
Submit all paperwork to the Registrar of Companies (RoC) for approval.
Once approved, your OPC is officially registered.
Any Indian citizen who is a resident in India (living in the country for at least 182 days in the last year) can register an OPC. The individual must be at least 18 years old. You will also need to appoint a nominee who will take over the company in case something happens to the shareholder.
An OPC must file annual financial statements and maintain proper records. It also needs to appoint an auditor to audit its financials. The regulatory requirements are simpler than those for larger companies, but it still needs to adhere to basic corporate governance standards.
