Advantages of One Person Company
One Person Company (OPC) also known as one Man Company is another form of Private Limited Company having one member. This form of company gave wings to the sole entrepreneur who wanted to have their own company. Being private limited company, they provide the sole owner to have total control on the Company. Since it is run by a single person, various clauses such as conducting of Board meeting, General meeting has been waived off. OPC is like a boon for entrepreneurs who wanted to start, who did not have partners to collide with.The basic difference between a sole proprietor and one person company is:
|S. No.||Basis of difference||Proprietorship||One Person Company (OPC)|
|1.||Nature of Business||It’s a sole proprietor business wherein the owner and the business are deemed to be a single person.||It’s a form of private limited company wherein the company and the owner are two different legal people.|
|2.||Identity||The identity of the business and the Owner is one. They cannot be identified as a separate person.||Being a legal person, the OPC is different from its owner.|
|3.||Liability of the Owner||The liability of the owner is unlimited. Personal property of the owner can be attached easily to pay off the liability of the business.||The liability of the owner is limited to the extent of their shareholding. Being a separate entity, the personal property of the shareholder cannot be attached.|
|4.||Perpetual Succession||The business may end up with the death of its owner.||Company being a separate entity, have perpetual succession.|
|5.||Wind up||It is easy to wind up a proprietorship business.||Winding up of an OPC is a lengthy process.|
- Legal Person: One person company is an artificial legal person which is being run by the individual person. This is one of the major benefits of working as one Person Company instead of proprietorship, as an individual member is not liable for the act done by the company.
- Nature: It’s a new version of private limited company, where there can only be a single shareholder.
- Perpetual Succession: Company being an artificial person does not have any impact of change of shareholder. Members may come and members may go but a company goes on forever. Thus, the cessation/ death of director/ or members does not affect the life of one person company. Nominee appointed in such company shall take place against the death of earlier director or member.
- Liability: unlike proprietorship or partnership, the liability of member is restricted to the extent of share capital of the company. Hence, the property of the owner cannot be attached to pay off the liability at the initial stage. The liability of member is limited upto the value of shares subscribed by them.
- Nomination: In case of the death of the sole shareholder of OPC, then all the assets and liabilities are automatically transferred to the nominee of the OPC.
- Minimum Number of Member and Director: Only one shareholder and/or minimum one director is required to incorporate an OPC.
- Wind up: An OPC can be wound up only through legal procedure as given under the law.
- Minimum capital requirement: there is no minimum capital requirement for registration of one Person Company.
- Power to be sued and sue: As it is separate legal entity in the eye of law, an One Person Company can file a suit against the third party in its own name and the third party may also file suit against the company.
- Scope of expansion: unlike proprietorship or partnership firm, chances of expansion are much higher in case of One Person Company.
Incorporation of One Person Company may give wings and helps you in the accomplishment of your dreams. However, if you are still not clear about how to register one person company may benefit your business, then feel free to contact us for detailed discussion at 8010233173 or drop us an email @ firstname.lastname@example.org / email@example.com