One Person Company and Section 8 Company

Eligibility rules and compliance thresholds can change. This article is for general information and does not constitute tax advice.

One Person Company (OPC)

A single member, typically also the sole director, plus a mandatory nominee who consents in Form INC-3. Only a natural person who is an Indian citizen (resident or NRI) can form one; a person can be member or nominee of only one OPC at a time. No minimum paid-up capital; the name carries the mandatory suffix “(OPC) Private Limited.” An OPC can’t do non-banking financial or investment activity as its principal business, can’t raise public deposits, and foreign citizens/entities can’t hold shares. It’s exempted from holding an AGM, but unlike an LLP, its accounts must be audited every year regardless of size. The old mandatory conversion trigger (₹50 lakh capital / ₹2 crore turnover) was removed in 2021; conversion is now voluntary only. Taxed exactly like any other company, at standard corporate rates.

Section 8 Company

Exists specifically for non-profit purposes (commerce, art, science, education, research, social welfare, religion, charity, environmental protection). Requires a specific licence from the Central Government on top of ordinary incorporation, and income can never be distributed as dividend, regardless of profitability. Can be structured as a private (min 2 members) or public (min 7 members) limited company. Registration as a Section 8 company doesn’t itself grant income tax exemption — that needs separate 12A/12AB registration, and 80G eligibility for donors needs its own approval too.

The Explicit Line Between Them

An OPC cannot be incorporated as, or later converted into, a Section 8 company. They’re structurally mutually exclusive: an OPC is fundamentally a for-profit vehicle for a single owner, a Section 8 company fundamentally a non-profit vehicle that can never distribute what it earns.