A S&Co Story - OPC Explained

 


Solo but Structured

Understanding OPC in Simple Terms

It was a breezy weekday morning at S&Co. CA Srini had just wrapped up a video meeting when Mr. Agarwal, a recently retired professional, walked in for his scheduled appointment. After taking Voluntary Retirement from a 30-year corporate career, he had plans to start a small consulting firm and wanted to explore the best way to formalize it.

"Should I register a partnership? Maybe an LLP?" Mr. Agarwal began, settling into the chair opposite Srini.

Srini smiled. “You’ve got several options - but let's see what fits your needs best. Since you plan to start alone, have you heard of a One Person Company - an OPC?”

Mr. Agarwal shook his head. That caught the attention of three staff members seated nearby - Jagruti, Pooja, and Prajakta - who paused their work to listen in. OPC was a term they'd often seen on MCA forms, but never truly understood.

Srini continued, “An OPC is a relatively new structure designed for solo entrepreneurs. It allows a single individual to form a company with limited liability and corporate status, much like a private limited company.”

“So I can be the only owner?” asked Mr. Agarwal.

“Yes,” Srini nodded. “You’ll be the sole shareholder and director. But there’s one mandatory requirement - you’ll need to nominate someone who’ll take over the company’s affairs in case something happens to you.”

“Oh!” exclaimed Pooja, “like a legal heir?”

“Not exactly,” Srini clarified. “The nominee is more of a legal fallback. They won’t hold shares unless the original member becomes incapacitated or passes away.”

Jagruti jumped in, “What about compliance and taxes? Is it treated like a normal company?”

“Good question,” said Srini. “Yes, an OPC is taxed like any other private limited company, currently at 22% plus surcharge and cess, under the concessional regime. You’ll need to maintain books, get audited if turnover crosses ₹1 crore, and file annual returns.”

“And are there any limitations?” Mr. Agarwal asked.

Srini leaned forward, “Yes, two major ones. First, you cannot incorporate more than one OPC at a time or be a nominee in more than one. Second, if your turnover crosses ₹2 crore or paid-up capital exceeds ₹50 lakhs, the OPC must convert into a private limited company.”

Prajakta looked thoughtful. “So it’s perfect for small consultants or solo startups?”

“Exactly,” said Srini. “It gives you the brand credibility of a company without the complexities of partners or investors initially. And if your business grows, the structure can evolve.”

Mr. Agarwal smiled, visibly more confident. “Then OPC it is. Let’s get started.”

As the meeting concluded, even the young staffers had a clearer picture of how a one-person business could be formalized smartly. For someone just stepping into entrepreneurship, OPC could be the perfect blend of independence, structure, and simplicity.

The content made available in this article is for general informational purposes only. While every effort has been made to ensure the accuracy and completeness of the content, it should not be considered as a substitute for professional consultation. 

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