With the latest and tremendous changes in business and making business setup easy in India, One Person Company is a unique concept introduced by the Ministry of Corporate Affairs in order to encourage the small traders and entrepreneurs. One of the major advantages of an OPC is that there can be only one member in an OPC, where in case of Private Limited Company or a Limited Liability Partnership minimum two persons are required. Similarly as in case of a company, a natural person, who is a citizen of India, shall be eligible for registering a One Person Company, with the requisite that the person should be resident of India. One Person Company is defined in the Companies Act 2013 as a Company which has only one member. A single shareholder holds 100 percent shareholding. One person can form a company without any additional shareholder, and if the member is willing to add shareholders, all he needs to do some procedural compliances to convert OPC .
Minimum requirement for starting One Person Company
Minimum One Person
Minimum Capital shall be ₹100,000
DIN for person who is proposed to be owner of Company
Digital Signature (DSC) for one person
Consent From the owner & nominee
Proof of Registered Address (like light bill / Rent agreement etc.)
NOC from the owner of premises
Advantages of One person company Registration:
Quick Start: To start an OPC is a quick mechanism and can be done within a period of 6-7 Days. It provides a quick start from legal procedural point of view. You can get an OPC registered with Ministry of Corporate Affairs very quickly.
Distinct legal entity: Like any Company whether Private Limited or a Public Company, One Person Company has a distinct legal entity from its members which is capable of doing everything that an entrepreneur would do. In many aspects it has similar features to that of a Private Limited Company.
Compliances requirements: OPC will also be required to comply with the provisions as applicable to Private Companies. However OPC still enjoys a number of exemptions and therefore have lesser compliance burden as compared to a Private Limited Company.
Legal Status to a Business: One Person Company not only gives the entrepreneurs the legal status to the business but also a social recognition as it enjoys the same status as that of a Private Limited Companies which help the entrepreneur to attract quality workforce along with designation like Directorship which cannot be used by Partnership firms or Limited Liability firms.
Easy Access to loans from banks: Generally Banks prefer to lend loans to One Person Company rather than Proprietary Firms or Partnership Firms . In certain circumstances it is advisable to many entrepreneurs to start up business as One Person Company rather than Proprietary Firm and Partnership Firm.
The Only Owner: Being the sole owner is the best advantage for incorporating an OPC which in turn makes decision making of the business more quick without much unnecessary intervention making functioning of business more smooth.
