The incorporation of OPC into the legal system is a step that would promote the corporatization of microbusinesses and entrepreneurship with a less onerous legal framework so that the small business owner is not required to spend a lot of time, energy, and money on intricate legal compliances. Individuals will be able to contribute to economic progress thanks to this, and it will also create job opportunities. Under the Companies Act of 2013, the One Person Company, a sole proprietorship and company type of business, has been given concessional/relaxed conditions. Under the One Person Company (OPC) idea, the Companies Act of 2013 now allows a single national person to form a company.

Origin of the concept in India
In the report of the Dr. J.J. Irani Committee, the idea of OPC was floated. OPC was briefly mentioned by the Irani Committee in its report. The committee offered numerous classifications of firms in Chapter III, “Classification and Registration of Companies,” as shown below.

1 The concept of ‘One Person Company’ may be introduced in the Act with following characteristics :-
(a) OPC may be registered as a private Company with one member and may also have at least one director;
(b) Adequate safeguards in case of death/disability of the sole person should be provided through appointment of another
individual as Nominee Director. On the demise of the original director, the nominee director will manage the affairs of the company till the date of transmission of shares to legal heirsof the demised member.
(c) Letters ‘OPC’ to be suffixed with the name of One Person

Companies to distinguish it from other companies.”
OPC’s effect on Indian entrepreneurship In India, the idea of OPC is still in its infancy and needs more time to develop and be completely embraced by the corporate community. The OPC style of company organization is poised to overtake other business organization models in the future, particularly among small business owners. The advantages of using this idea are many, to name a few –

• Minimal paper work and compliances
• Ability to form a separate legal entity with just one member
• Provision for conversion to other types of legal entities by induction of more members and amendment in the Memorandum of Association.
• The One Person Company concept holds a bright future for small traders, entrepreneurs with low risk taking capacity, artisans and other service providers.
• The OPC would act as a launch pad for such entrepreneurs to showcase their capabilities in the global arena.
  The counterparts of Indian OPCs in Europe, United States and Australia have resulted in further strengthening of the economies in the respective countries. OPCs in India are aimed at structured, organised business units, having a separate legal entity ultimately playing a crucial role in further strengthening of the Indian economy.

One Person Company: As per section 2(62) of the Companies Act, 2013, “One Person Company” means a company which has only one person as a membe.

Salient features of OPC

The salient features of OPC are:

• Desire for personal freedom that allows the Professional skilled person to adopt the business of his choice.
• Personality driven passion and implementation of a business plan.
• The desire of the entrepreneurial person to take extra risk and willingness to take additional responsibility.
• Personal commitment to the business which is a sole idea of the person and close to his heart.
• It is run by individuals yet OPCs are a separate legal entity similar to that of any registered corporate.
• A One Person Company is incorporated as a private limited company.
• It must have only one member at any point of time and may have only one director.
• The member and nominee should be natural persons, Indian Citizens and resident in India. The term “resident in India” means a person who has stayed in India for a period of not less than 182 days during the immediately preceding one calendar year.
• One person cannot incorporate more than one OPC or become nominee in more than one OPC.
• If a member of OPC becomes a member in another OPC by virtue of his being nominee in that OPC then within 180 days he shall have to meet the eligibility criteria of being Member in one OPC.
• OPC to lose its status if paid up capital exceeds Rs. 50 lakhs or average annual turnover is more than 2 crores in three immediate preceding consecutive years.

• No minor shall become member or nominee of the One Person Company or hold share with beneficial interest.
• Such Company cannot be incorporated or converted into a company under section 8 of the Companies Act, 2013.
• Such Company cannot carry out Non Banking Financial Investment activities including investment in securities of any body corporate.
• No such company can convert voluntarily into any kind of company unless 2 years have expired from the date of incorporation, except in cases where capital or turnover threshold limits are reached.
• An existing private company other than a company registered under section 8 of the Act which has paid up share capital of Rs. 50 Lakhs or less or average annual turnover during the relevant period is Rs. 2 Crores or less may convert itself into one person company by passing a special resolution in the general meeting.