Is There A Turnover Limit For One Person Company (OPC) In India?

Many Indian business owners still worry about a ₹2 Crore turnover limit for One Person Companies (OPCs). However, this is a myth based on old rules. Since April 1, 2021, the government removed all mandatory turnover and capital limits. You can now grow your OPC as large as you want without being forced to convert. This guide clarifies the new 2026 rules, explains why the old limits were removed, and helps you understand the latest benefits for small companies.

What Is A One Person Company?

A One Person Company (OPC) represents a unique corporate structure introduced under Section 2(62) of the Companies Act, 2013, allowing a single individual to incorporate and run a private company with limited liability protection. Unlike sole proprietorships, OPCs offer separate legal entity status, perpetual succession, and credibility for contracts or loans, while requiring only one shareholder and one director (who can be the same person). Key features include mandatory appointment of a nominee to take over upon the sole member’s death or incapacity, simplified compliance compared to larger companies, and no need for annual general meetings. OPCs suit freelancers, consultants, startups, and small-scale innovators seeking corporate benefits without partners. Formation involves filing SPICe+ (INC-32) with the Registrar of Companies (ROC), attaching digital signatures, identity proofs, and nominee details. Post-incorporation, OPCs must convert their name by adding “OPC Private Limited” and file annual returns like AOC-4 (financials) and MGT-7 (annual return), often with fewer disclosures than multi-shareholder firms. This structure democratized company formation, especially post-2013, enabling solo entrepreneurs to scale professionally.

What is the Current OPC Turnover Limit?

Historically, the Companies Act mandated that if an OPC’s turnover crossed ₹2 Crores or its paid-up capital exceeded ₹50 Lakhs, it had to forcibly convert into a Private Limited Company. However, under the Companies (Incorporation) Second Amendment Rules, 2021 (effective 1 April 2021), these mandatory limits were removed by substituting Rule 6. This means there is no statutory turnover limit today that forces an OPC to convert only because turnover has increased- conversion is no longer triggered purely by crossing a turnover figure.

Current OPC Turnover Limit

As of January 2026, no statutory “turnover cap” mandates an OPC to convert to a private or public company simply because it crosses ₹2 crore or any other figure. The Companies (Incorporation) Second Amendment Rules, 2021, effective 1 April 2021, substituted Rule 6 entirely, eliminating the previous triggers based on paid-up share capital over ₹50 lakh or average annual turnover exceeding ₹2 crore. Official MCA notifications confirm OPCs can now operate indefinitely regardless of size, promoting sustained growth without structural compulsion.

Key Benefits of an OPC in 2026

Since the turnover "ceiling" has been lifted, the OPC has become the go-to for many startups. Here is why:

• Limited Liability: Your personal assets (home, car, savings) are safe. Only the money invested in the business is at risk.
• Separate Legal Entity: The company is a "person" in the eyes of the law. It can own property and sue in its own name.
• Low Compliance: Compared to a Private Limited Company, an OPC does not need to hold Annual General Meetings (AGMs) and has fewer board meeting requirements.
• Complete Control: You are the sole shareholder and director of the company. No partners, no disputes.

Comparing OPC with Other Structures (2026)

In 2026, many founders compare OPC, Sole Proprietorship, and Private Limited Company to choose the right structure. Here is a quick feature-wise comparison covering turnover rules, legal status, liability, members, and tax treatment.

When Should You Voluntarily Convert?

Even though there is no forced turnover limit anymore, many businesses choose to convert. This paragraph explains the 1 April 2021 change that removed mandatory OPC conversion on crossing ₹2 crore turnover, and clarifies that growth won’t force conversion, but compliance still continues. Voluntarily.

You might consider this if:

1. You need Funding: Investors (VCs and Angel Investors) prefer Private Limited Companies because they can easily issue shares to multiple people.
2. You are scaling: If you need more than one director to manage specialised departments.
3. Brand Perception: For certain international tenders or large corporate contracts, a "Private Limited" tag carries more weight.

OPC Compliance Calendar: 2026 Edition

Since an OPC is exempt from holding an Annual General Meeting (AGM), your deadlines are generally calculated from the close of the Financial Year (31st March 2026).

1. Annual MCA Filings (The "Big Two")

• Form AOC-4 (Financial Statements)
• • Due Date: Within 180 days from the end of the financial year.
  • Deadline: 27th September 2026
  • Note: Includes your Balance Sheet, P&L Account, and Auditor’s Report.
• Form MGT-7A (Annual Return)
• • Due Date: Within 60 days from the date the AGM "would have been held" (technically 30th Sept for OPCs).
  • Deadline: 29th November 2026
  • Note: This is an abridged form specifically for OPCs and Small Companies.

2. Director & Tax Compliance

• DIR-3 KYC (Director KYC)
• • Major 2026 Update: The MCA has introduced a 3-year cycle for KYC. If you completed your KYC in 2025, you might only need a simple "Web-based" confirmation, or you may be exempt until the next cycle.
  • Deadline: 30th September 2026. (Do not skip checking your DIN status.
• Income Tax Return (ITR-6)
• • Deadline: 31st October 2026 (assuming a Tax Audit is required or the company is a corporate entity).
• Form DPT-3 (Return of Deposits)
• • Deadline: 30th June 2026.
  • Note: Even if you have "nil" deposits but have outstanding loans from directors, you must file this.

Where Did the ₹2 Crore OPC Turnover Limit Come From?

If you still see people talking about a ₹2 crore OPC turnover limit, they are usually referring to the old OPC rules. Earlier, OPCs were allowed to start small, but once the business grew beyond a point, the law required them to shift to a Private Limited Company or Public Company.

1) Old OPC Rule (Before 1 April 2021)

Up to 31 March 2021, an OPC had mandatory conversion limits. It had to convert if it crossed either of these:

• Paid-up capital limit: more than ₹50 lakh, or
• Turnover limit: average annual turnover above ₹2 crore

Here, “relevant period” meant the previous 3 consecutive financial years. If the 3-year average turnover went above ₹2 crore, the OPC generally had to convert within 6 months.

Why the ₹2 Crore Limit Was Removed?

The government (MCA) removed these limits to make it easier for solo founders to scale without adding partners just for compliance. So, from 1 April 2021, under the Companies (Incorporation) Second Amendment Rules, 2021:

• No compulsory conversion only because turnover increases (₹2 crore, ₹10 crore, ₹20 crore-turnover alone does not force conversion).
• Conversion is voluntary- you can choose to convert whenever you want, instead of being pushed by a turnover milestone.

What Changed After 1 April 2021? (Recent Changes)

This paragraph explains the 1 April 2021 change that removed mandatory OPC conversion on crossing ₹2 crore turnover, and clarifies that growth won’t force conversion, but compliance still continues.

Mandatory OPC conversion trigger removed:

Before 1 April 2021, an OPC could be forced to convert if it crossed certain limits (like ₹2 crore turnover). After the update, this compulsory rule was removed. Rule 6 was substituted, and now it mainly explains the process of converting an OPC, not a turnover-based deadline that makes conversion compulsory. In simple words, turnover growth no longer automatically changes your OPC status. Also, conversion is now allowed anytime. Earlier, many OPCs had to wait before converting, but now you can convert whenever you feel it is needed (based on business plans).

If your OPC crosses ₹2 crore turnover today, what happens?

If your OPC turnover goes above ₹2 crore, nothing automatic happens under the Companies (Incorporation) Rules. Your company does not get forced into converting just because revenue increased. You can continue running the business as an OPC.

However, you should still review these practical points:

• Do you want to convert by choice?
  Conversion may help if you plan to raise funding, add co-founders/shareholders, issue ESOPs, or bring in more directors for expansion.
• Your compliance does not stop
  Even if you remain an OPC, you must still follow applicable ROC filings, tax rules, GST rules, and audit requirements (these depend on turnover, transactions, and other thresholds).
  So, while the OPC turnover limit for mandatory conversion is removed, your financial and compliance responsibilities continue as your business grows.

Importance of Turnover Limit for One Person Company

Understanding the one-person company turnover limit is important because many founders still believe that crossing ₹2 crore turnover automatically forces OPC conversion. Knowing the current rule helps you plan growth confidently, avoid wrong compliance decisions, and choose the right time to convert (only if it benefits your business). It also helps you separate OPC conversion limits from other turnover-based requirements like GST, audit, and ROC compliances, which may still apply even when there is no mandatory conversion trigger.

Comparison of Key Compliance Forms (2026)

This comparison lists the key OPC compliance forms for 2026, their purpose, and due dates, and highlights GST turnover limits you should monitor.

Lawyer's Insight: Even though the forced turnover limit is gone, I always advise my clients to keep an eye on their GST registration. While the Companies Act is relaxed, GST registration becomes mandatory once your turnover exceeds ₹40 Lakhs (for goods) or ₹20 Lakhs (for services) in most states.

Pro-Lawyer Tips for 2026

1. Check your DSC: Digital Signature Certificates often expire after 2 years. Ensure yours is active before September, or you won't be able to file any forms.
2. Audit is Mandatory: A common myth is that small OPCs do not need audits. False. Regardless of turnover, an OPC must have its accounts audited by a practising CA.
3. MSME-1 Deadlines: If you owe money to vendors registered under MSME for more than 45 days, you must file MSME-1 by 30th April and 31st October 2026.

Conclusion

To sum it up, the one-person company turnover limit of ₹2 crore is no longer a conversion cap- it was an old rule that ended on 1 April 2021. In 2026, your OPC can scale to ₹5 crore, ₹10 crore, or beyond without being forced to convert, as long as you meet regular ROC filings like AOC-4 and MGT-7A and keep your audit and director KYC up to date. The real “limits” to track today are practical compliance triggers like GST registration (₹20 lakh/₹40 lakh), audits, and other statutory filings- not your turnover alone. If you plan to raise funding, add shareholders, or expand leadership, you can convert voluntarily when it suits your business.

Disclaimer: This article is for general information only and not legal/tax advice. OPC and GST rules may change—verify latest MCA/GST updates or consult a qualified CA/CS/legal expert.