Section 2(62) of Companies Act defines a one-person company as a company that has only one person as to its member. So, an OPC is effectively a company that has only one shareholder as its member.

If there is only one promoter/founder, One Person Company (OPC) is the best way to start a company. OPC is one of the significant milestones of the Companies Act, 2013, introduced to encourage self-employment.

An OPC gives the advantage of limited liability to entrepreneurs, whereby the liability of the member will be limited to the unpaid subscription money. This benefit is not available in case of a sole proprietorship.