Capital from the Sole Member

• The primary source of capital for an OPC is the investment made by the sole member.
  
• This is reflected as paid-up share capital, which the member subscribes to at the time of incorporation or later.
  
• The member can inject additional funds into the company in the form of further share capital or unsecured loans.
  
• All capital must be held by one individual only, as OPCs do not permit multiple shareholders.
  
• Capital contributions must be recorded in the company’s books and statutory registers.
  

Restrictions on Equity Raising

• OPCs cannot raise equity capital from the public as they are prohibited from issuing shares to multiple investors.
  
• They cannot be listed on stock exchanges, nor can they raise money via Initial Public Offerings (IPOs).
  
• Equity-based fundraising from private investors, angel networks, or venture capitalists is not permitted under the OPC structure.
  
• If capital expansion through equity is necessary, the OPC must convert into a private limited company first.
  
• This limitation is a key distinction from other business structures, like private or public companies.
  

Use of Debt and Loan Instruments

• OPCs can raise debt capital from banks and financial institutions through business loans or credit lines.
  
• Personal loans from the sole member or related parties may also be infused as unsecured loans.
  
• Such loans must be documented and properly disclosed in the company’s financials.
  
• Interest paid on such borrowings is usually tax-deductible.
  
• Loans and debt instruments are common capital-raising tools for OPCs without affecting ownership.
  

Authorized Capital and ROC Compliance

• An OPC must declare its authorized share capital at the time of incorporation.
  
• To raise more capital, the company must increase its authorized capital by altering the Memorandum of Association (MoA).
  
• Any such change must be filed with the Registrar of Companies (ROC) using the appropriate forms.
  
• Additional shares can then be issued to the same sole member, increasing the paid-up capital.
  
• These procedures ensure transparency and compliance with the Companies Act, 2013.
  

Conversion for Advanced Capital Needs

• If an OPC seeks to raise capital from external investors, private equity, or co-founders, it must convert into a private limited company.
  
• This allows for multiple shareholders, share transferability, and structured funding options.
  
• The conversion process must comply with legal thresholds such as turnover or capital limits.
  
• After conversion, the company can issue equity shares to new investors as per SEBI and Companies Act regulations.
  
• This path supports business scaling and capital expansion beyond OPC constraints.