Why the 2021 change matters
Until 2021, an OPC that crossed ₹2 crore in average annual turnover or ₹50 lakh in paid-up capital was required to convert into a private or public company within a fixed window — the structure was designed as a stepping stone for very small businesses, not a permanent form. The Companies (Incorporation) Second Amendment Rules, 2021 removed that requirement entirely, with effect from 1 April 2021. An OPC can now grow without limit and remain an OPC for as long as its founder wants, converting to a private company only if and when they choose to — commonly to bring in investors or additional shareholders, not because a threshold forces it.
This removed a real source of anxiety for growing solo-founder businesses, who previously had to watch their turnover and capital figures to avoid triggering a forced restructuring. Voluntary conversion remains available at any time the founder wants it.
Who can form an OPC
- A natural person — not a company or other entity — can be the sole member.
- The member must be an Indian citizen; both residents and non-resident Indians are eligible following the 2021 amendment.
- A person can be a member of only one OPC at a time.
- A nominee must be named at incorporation, who would become the member if the original founder dies or becomes incapacitated.
- An OPC cannot be incorporated for, or later convert into, a Section 8 (not-for-profit) company.
Documents required
- PAN, identity proof (Aadhaar, passport, voter ID or driving licence), and address proof of the sole member.
- Consent of the nominee, along with their PAN and identity proof.
- Proof of the registered office — utility bill, and rent agreement with owner's NOC if rented.
- Digital signature certificate for the member.
- The proposed company name, checked against existing companies, LLPs and trademarks.
The OPC registration process, step by step
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Obtaining the digital signature and nominee consent
The sole member's digital signature is obtained, and the nominee's written consent to act, along with their identity documents, is collected.
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Name reservation
The proposed name is checked and reserved through SPICe+ Part A, the same process used for a private limited company.
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Filing SPICe+ Part B
The incorporation application is filed with the member's and nominee's details, the registered office, and the memorandum and articles.
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Certificate of Incorporation
On approval, the Certificate of Incorporation is issued along with PAN and TAN, in the same way as for a private limited company.
Ongoing compliance for an OPC
- Statutory audit — mandatory every year, the same as any other company, regardless of turnover.
- Annual filing — AOC-4 and the simplified MGT-7A, rather than the full MGT-7 a larger company files.
- Board meetings — an OPC with only one director is exempt from the usual minimum-frequency requirement, though it must still hold at least one meeting every half-year with a gap of not less than 90 days between them where it has more than one director.
- Income tax return — ITR-6, the same form a private limited company files.
Practical notes from our engagements
- Founders still budgeting for a forced conversion that no longer exists. Since the 2021 change removed the turnover and capital triggers, an OPC genuinely doesn't need to convert on financial grounds anymore — this is worth knowing clearly rather than continuing to plan around an outdated rule.
- Nominee consent treated as a formality. The nominee needs to genuinely understand and accept the role, since they become the member if something happens to the founder — this isn't a name filled in on a form without the person's real awareness.
- Assuming OPC status avoids all company compliance. An OPC still requires an annual statutory audit and ITR-6 filing — the compliance relief compared to a private limited company is real but partial, not a wholesale exemption.
How we handle OPC registration
We confirm the founder and nominee both understand their respective roles before filing, particularly since the nominee's consent is a substantive legal commitment, not paperwork. We also make sure founders understand that since 2021 there's no financial threshold forcing conversion, so the decision to convert later, if ever, is entirely theirs to make on its own merits.
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Frequently asked questions
Does an OPC have to convert into a private limited company once it grows large enough?
No — the mandatory conversion triggers based on turnover (₹2 crore) or paid-up capital (₹50 lakh) were removed with effect from 1 April 2021. An OPC can now remain an OPC indefinitely regardless of size.
Can a non-resident Indian form an OPC?
Yes — this was permitted by the same 2021 amendment that removed the mandatory conversion rule. Previously, only resident Indian citizens could incorporate an OPC.
Can I be a member of more than one OPC at the same time?
No — a person can be the sole member of only one OPC at a time.
What is the nominee's role in an OPC?
The nominee becomes the member of the OPC if the original founder dies or becomes incapacitated, ensuring the company continues without interruption. Their written consent is required at incorporation.
Does an OPC need a statutory audit?
Yes — like any company, an OPC's accounts must be audited every year regardless of turnover.
Can an OPC voluntarily convert to a private limited company?
Yes, at any time the founder chooses, by following the conversion procedure and increasing the number of members and directors to at least two.
Can an OPC be formed for a not-for-profit purpose?
No — an OPC cannot be incorporated as, or later converted into, a Section 8 company.