Compliances of One Person Company registration

Amendments to One Person Company Compliance

Online Legal India LogoBy Online Legal India Published On 30 Nov 2021 Updated On 06 Jan 2023 Category One Person Company

Company Registrations has seen a sharp rise in recent times even with the pandemic overshadowing the entire world. The pandemic has given rise to the need for online platforms for buying and selling goods and services.

The latest amendment in the Companies Act in the 2021 Budget Session has brought drastic changes. It has helped the growth of the businesses with newer policies. The Majority of the new companies getting registered are One Person Companies which are generally startups.

What are One Person Companies?

According to Section 2(62) of the Companies Act, One Person Companies are companies that have a single member. The other members of a company are nothing but mere subscribers to the memorandum of association, or the shareholders.

These companies are generally created when there is just one founder or promoter of the business setup. Individuals whose business is in the initial stage prefer to follow the One Person Company registration rather than a sole proprietorship because of the benefits it has to offer.

What are the amendments in favor of OPCs?

The Budget session of 2021 brought out various changes that have impacted the economy. One of the major highlights of the budget,2021 was the amendments made to the OPC Registration process and necessary compliance.

Some of the major highlights of the amendments for the OPC are:

  • NRIs were not allowed to incorporate OPCs but now a person of Indian origin can incorporate an OPC.

  • The definition of residence has been changed where the residency period has been proposed to be reduced to 120 days from 182 days for NRIs.

  • Only a person of Indian origin shall be the nominee for being the sole member of a One Person Company.

  • No one can start or become the nominee of another OPC.

  • Minors are not applicable to be included in OPC in any manner. This is not allowed under section 8 of the Act.

  • Companies with minors cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporate. 

  • An OPC can not convert to other companies before two years from incorporation.

  • There is an exception when the threshold limit is increased as the Paid-up capital and turnover of the small company shall not exceed rupees two crores and rupees twenty crores respectively.

  • There are no restrictions on the growth of OPCs in terms of their paid-up capital & turnover.

What are the privileges of One Person Companies?

Various benefits are enjoyed by the OPCs in India. These benefits are the result of the latest amendments to the Companies Act. Some of the privileges and exemptions under the Companies Act are:

  • The need to hold an AGM is not mandatory.

  • There is no need to include cash flow in the financial statement.

  • The need to sign the annual returns does not require the company secretary as the directors can also do so.

  • The Provisions for independent directors do not apply to them.

  • There is room for additional grounds to vacate the director’s office.

These are some of the features among many other benefits that are provided to the OPCs.


OPCs have been one of the most prominent elements of the latest Budget session. The focus was to promote the growth of newer and newer companies so that it improves the economy. The need to know the basics of OPC is mandatory to set up an OPC. The benefits provided for the OPCs are one of the major elements for people's options for OPCs over any other form of company.

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Anjali Malhotra


Anjali Malhotra


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