Prohibited Financial Activities

• OPCs cannot carry out Non-Banking Financial Investment (NBFI) activities.
  
• They are barred from activities like lending, investment in securities, and financing businesses.
  
• OPCs cannot operate as a Chit Fund, Nidhi Company, or NBFC.
  
• They are not allowed to accept public deposits or offer financial services.
  
• These restrictions ensure financial stability and reduce risk exposure.
  

Public Fundraising Limitations

• OPCs cannot issue equity shares to the public or list on stock exchanges.
  
• They are not permitted to raise capital through IPOs or public offerings.
  
• This limits access to large-scale equity investment or crowd-sourced funding.
  
• OPCs must rely on personal funds, loans, or private placements for capital.
  
• Such restrictions confine the scale of fund-driven expansion.
  

Ownership and Control Limitations

• An OPC can have only one member and one nominee, limiting structural expansion.
  
• It cannot convert voluntarily into a public or private company within two years of incorporation, unless required by law.
  
• OPC cannot include partners, co-founders, or multiple shareholders within its structure.
  
• There is no provision to bring in additional equity investors without conversion.
  
• The structure suits small, individual-led ventures but restricts collaborative enterprises.
  

Turnover and Capital Thresholds

• If the turnover exceeds ₹2 crore in any of the last three financial years, OPC must convert into a private or public company.
  
• If the paid-up share capital exceeds ₹50 lakh, conversion is also mandatory.
  
• These thresholds act as growth ceilings within the OPC framework.
  
• Continuing beyond these limits without converting leads to penalties and legal issues.
  
• The company must regularly assess its financial status to stay compliant.
  

Sectoral and Regulatory Restrictions

• OPCs may not be eligible for operating in regulated sectors requiring multi-shareholder governance.
  
• Some business licenses or contracts may not accept OPCs as eligible entities.
  
• Activities requiring multi-level board structures or investor participation may not suit OPCs.
  
• Government tenders or corporate tie-ups may prefer or require a private limited status.
  
• These limitations affect eligibility and competitiveness in certain industries.