One Person Company
A one person company is kind of business which is owned by a single person. In this kind of a business, the same person can both be the director as well as the shareholder. It’s a better option than a sole proprietorship and gives a person full control over the business while limiting his liabilities.
One Person Company is a business entity in which there is only one owner with limited liabilities who can act both as a shareholder as well as the director. The concept of OPC is basically to eradicate the limitation of a sole proprietorship, which is the most popular form for small businesses in India. The liability of owner is limited to the invested capital in this form.
The idea of One Person Company (OPC) in India was introduced to give a boost to entrepreneurs who have great potential to start their own venture by allowing them to create a single person company.
If you independently want to commence your business without involving any other person, then One Person Company (OPC) is the ideal choice for you.
If an OPC exceeds a turnover of over Rs. 2 crore or has a paid-up capital above Rs. 50 lakhs, it must be turned into a private or public limited company within six months
Proprietorship has many disadvantages like
- One cannot take investments
- Unlimited liabilities
- No reservation of name on National Level
- No Transparency
One Person Company has following features and restrictions:
- It allows a significant degree of separation between operations and ownership.
- Less compliance is needed as compared to a private limited company.
- It is useful for small entrepreneur to directly access target market.
- Banking and financial institutions prefer to lend money to the company instead of proprietary firms.
- It makes decision-making process much faster because of single ownership.
- The owner can convert OPC to a private limited company with ease.
WHAT IS INCLUDED IN OUR PACKAGE?
- 1 Digital Signature
- 1 DIN (Director Identification Number)
- Drafting of MOA, AOA & other Affidavit & Declarations
- Notarization of Documents
- Stamping of Documents
- Filing of Forms
The liability of the shareholder is limited and personal assets are safe. The liability of the shareholder will only be limited to the unpaid subscription money in his name. OPC is a separate entity and there will be a true distinction between the promoter and the company.
There is only one owner who can act both as a shareholder as well as the director.
This leads to fast decision making and execution. Yet he/she can appoint as many as 15 directors in the OPC for administrative functions, without giving any share to them.
LEGAL STATUS & SOCIAL RECOGNITION
One Person Company is a Private Limited Structure in the eyes of law, which gives suppliers and customers a sense of confidence in business.
SEPARATE LEGAL ENTITY
The biggest advantage of a one person company is that its identity is distinct from that of its sole owner. If a promoter were to operate as a Sole Proprietorship, the business would come to an end on his/her death but since an OPC is a separate legal entity, therefore, ownership would pass on to the nominee and an OPC continue to exist.
OPC is one of the easiest forms of corporate entities to manage. Very few ROC filing is to be filed with the Registrar of Companies (ROC). No need to conduct Annual General Meeting (AGM), so lesser compliance cost.
- Minimum 1 Director
- Minimum 1 Shareholder (The director and shareholder can be same person)
- Only Indian residents can be Shareholder & Nominee