What are the Hidden Advantages of Forming One Person Company?
Till 31st August 2014, if you wanted to incorporate Private Company you needed at least one other person as per the companies act 2013. But, after an inauguration of One Person Company in the companies act, you can open private limited company without taking help of another person. One person company is a business entity which can incorporated by the one person only. It not only bought a big relief to the entrepreneurs but also help in the growth of the economy. If you are the only one what wants to start your company and want to avoid the issue partnership then you must go with One Person Company Registration India. It is one of the business formations introduced to help individuals in running business.
One Person Company Registration process:
- Minimum paid up capital shall be Rs. 1,00,000.
- It will have only one person as member.
- Memorandum of Association of such a company will compulsorily prescribe the name of the person, who in the event of death or disability of the subscriber shall assume his position.
- The member of the OPC will have the right to change the nominee at any time with due intimation to the Registrar.
- OPC can be formed as company limited by share capital or limited by guarantee or unlimited company.
- The words ‘One Person Company’ will have to be mentioned in brackets below the name of such company, wherever its name is printed.
- One person can form only up to one (1) OPC.
- An OPC can be formed only by an Indian Resident and citizen.
- DIN (Director Identification Number) for all the Directors are required.
- DSC (Digital Signature Certificate) for all the Directors is required.
Advantages of One Person Company:
- The very advantage of one person company is that you are not required to get a partner in order to run the business formation. If you are type of business person who doesn’t need any type of partnership in the business then you can go with One Person Company Registration. This business entity is formed for the individuals who are capable of implementing plan alone. One person company is specially known for an individual business.
- One person company holds many opportunities like the individual can take the more risk in business without affecting or suffering the loss of personal assets. This leads to an encouragement to initiate more start-ups and see skilled innovative minds.
- One person company with a bad credit score can even apply for loan. The credit score of the OPC will not be material if the score of OPC is as per norms.
OPC has one shareholder. The issue of transferring a portion of the share doesn’t arise at all because if it is done, the company will cease to be a “One person Company”. Transferring all the shares is also not practicable as it’ll change the entire the entire structure of the company is changing. This issue has not yet been dealt with, and interpretation of the law may provide us with the explanation that in an OPC, transfer of share is not allowed.
Features of OPC:
- Minimum 1 Shareholder
- Minimum 1 Director
- The director and shareholder can be the same person
- Minimum 1 Nominee
- Letters ‘OPC’ to be suffixed with the name of OPCs to distinguish it from other companies.
- If you having Private Limited Company are your dream, you should try with an OPC. It will give you a great idea of the functioning of a large scale business with minimized risk. You can get a great notion about the investment, operations and tasks with keeping your risk.
- To register One Person Company, you need to have a bank account which should have a minimum balance which could be as much less as 5000.
- Due to lesser activities and hurdles, running an OPC is always easy. Similarly, you are the only person to take decisions which makes processes faster. You do not have to carry out different legal activities as well.
- One Person Company is a Private Limited Structure; this is the most popular business structure in the world. Gives suppliers and customers a sense of confidence in business. Private limited companies structure enjoys corporate status society which helps entrepreneurs to attract quality workforce and helps to retain them by giving corporate designations.
- One person Company is suitable only for small business. OPC can have maximum paid up share capital of Rs. 50 Lakhs or Turnover of Rs. 2 Crores. Otherwise OPC need to be converted into Private Company.
- If your startup is a relatively a simple business model which would sustain within a capital of fifty lakhs or if you are looking for a corporate business form, to begin with, OPC would be a good choice, since there are very fewer compliances to follow, no audit requirements and complete control over ownership.
- Any business entity that runs in the form of company always enjoy an increased trust and prestige.
- Unlike proprietorship, any remuneration paid to the director is highly applicable as a deduction as per income tax.
- The personal assets will also be safe with form others.
- It promotes the entrepreneurship in an individual. A person who wants to run a business without any partnership can opt for OPC registration.
The concept of OPC is advantageous both for the regulators and the market players. If you are willing to open a business without opting for the partnership then OPC registration is the best for you. I hope, you may understand the registration procedure of OPC and its advantage. If you are looking for the OPC business entity, you can take the support of Unilex Business Consultant. Here, the professional will help you regarding registration procedure of OPC and make your business entity legal work hassle-free. Feel free to contact us anytime for any help regarding OPC registration.