What is a One person Company?
A One Person Company (OPC) is a type of business entity where only one individual holds the entire share capital and controls the company. It allows a single person to establish and operate a company with limited liability. OPCs are popular among entrepreneurs who wish to enjoy the benefits of a corporate structure while retaining full control over their business. OPCs are typically registered under specific regulations that govern their formation and operation, which may vary depending on the jurisdiction. These regulations usually require the appointment of a nominee director who will take over in case the sole member becomes incapacitated or dies.
Advantages of One person Company :
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Protection for Limited Liability of Directors Personal Assets
Startups frequently have to take on credit and borrow funds. If a typical partnership failed to make its loan payments, the partners' personal assets and savings would be at risk. In a one-person private limited corporation, the directors personal assets are safeguarded; only the business investment is lost.
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Increased trust and reputation in the market
OPC is a Private Limited Company, a well-known and widely used corporate structure in India. Businesses, suppliers, and government organizations favor doing business with private limited companies over sole proprietorships.
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Easy fundraising and loan approval
One of the simplest types of corporate entities to run is an OPC. Very few filings with the Registrar of Companies (ROC) are required. There is no requirement to have annual general meetings (AGMs) or other regular meetings.
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Enables funding and aids in the testing of business models
Startup entrepreneurs can test their business models more readily with the help of the OPC business. Once they have a product that can be sold, they can approach venture capitalists and angel investors for investment, and they can simply transform their OPC into a multi-shareholder Private Limited company.
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Total Authority over the Business with a Single Owner
It culminates in swift decision-making and action. However, OPC is able to designate up to 15 directors for administrative roles without offering them any equity.
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Easy to sell OPC Company
One Person Companies require relatively little in the way of paperwork and expenses to be sold, making OPC Companies easy to sell.
Minimum General Requirements for One person Company
- One shareholder at least
- Requirement of at least one nominee
- Rs. 1 Lac will be the minimum authorized share capital
- Requirement of at least one director
- Shareholders and Nominees may only be residents of India.
- Director's DIN (Director Identification Number)
- Directors and stockholders may be the same individual
- Certificate of Digital Signature (DSC) for one promoter and one witness
Required Documents for One person Company
- Proposed Partner’s KYC, address proof, email id, contact number etc.
- Proposed LLP’’s address, address proof, contact details.
- Bank Name (In which you want to open the company’s account from the list given on MCA Portal)