The concept of One Person Company in India was introduced through the Companies Act, 2013 The structure of the one-person company (OPC) in recent times was launched as a refinement of the structure of a sole proprietorship firm. In an OPC, a single promoter gains full authority over the company thereby, restricting his/her liability towards their contributions to the enterprise. Therefore, the said person will be the sole shareholder and director One of the biggest Plus points of a One Person Company (OPC) is that there can be only one member in an OPC. One Person Company is a separate legal entity from its promoter, offering limited liability protection to its sole shareholder. Also, there can be no opportunity for contributing to employee stock options or equity funding. Additionally, if an OPC has an average turnover of ₹2 crores thrice in a row and over or acquires a paid-up fund of ₹50 lakh and over, it has to be converted to a private limited company or public limited company within six months with Ministry of Corporate Affairs at the end of each Financial Year like all types of Companies. Therefore, it is essential for the Entrepreneur to carefully consider One Person Company before incorporation.

As per the report, it id suggested that with the increasing use of IT and emergence of a strong service sector in India, it was time for the Government to empower entrepreneurs own are capable of developing ideas and participating in the marketplace. One Person Company was introduced in the J.J Report to create empowerment for the entrepreneurs where they can give a shape to their ideas. As there is a progress in the use of information technology and growth in the service sector in India, government has launched the concept of OPC.. Further, it was also suggested that such an entity may be provided with a simpler regime through exemptions so that the single entrepreneur is not compelled to fritter away his time, energy and resources on procedural matters.

Before we understand the concept of a OPC, let us have a brief understanding of the various types of companies that can be formed. A company can be established for a lawful purpose mentioned below:
1. Seven or more persons, in case of a public limited company.
2. Two or more persons, in case of a private limited company.
3. One person, in case of a one-person company.

A one-person company has certain restrictions associated with its incorporation. Hence, before starting an OPC registration, it’s necessary to understand the ensure the promoter is eligible as per the Companies Act to register a OPC.
1. Only a Indian Citizen and resident in India can incorporate OPC.
2. Resident in India is a person who had resided in India for a period not lesser than 182 days in the prior calendar year.
3. Company or LLP cannot incorporate a OPC.
4. The minimum authorized capital is Rs 1, 00,000.
5. A nominee must be appointed by the promoter during incorporation.
6. Businesses involved in financial activities cannot be incorporated as a OPC.
7. When OPC paid-up share capital exceeds Rs.50 lakhs or turnover crosses Rs.2 crores. must be converted to a private limited company.

The rules for incorporation of OPC requires that the sole member of a OPC should include the name of a nominee in the CO. MOA, who will run the entity after the expiry or incapacity of the former. The document must contain the written consent of the nominee, which must also be filed with the Registrar during incorporation along with the MOA and AOA.

The nominee is entitled to withdraw his/her consent, in which case the sole member is required to nominate another member as a legal heir within 15 days of the notice of withdrawal. The nomination of new personnel must be intimated to the Company through a written consent in Form INC-3. The Company, in turn, is required to file the notice of withdrawal of consent along with the intimation of the new nominee with the Registrar in Form INC 4.

The member of a ‘One Person Company’ has right to change the nominee of the Company for any reason by providing notice in written to the Company. Again, the new nominee must consent to the nomination in Form INC 3, and the Company must file the notice of change and consent of the nominee with the Registrar with the applicable fee, within 30 days of receiving the change.