Advantages Of One Person Company

1674 Words7 Pages

Concept of One Person Company:

OPC is a new concept in India which has been introduced by the company’s act 2013. It is a new vehicle/form of business thereby enabling Entrepreneur(s) carrying on the business in the Sole-Proprietor form of business to enter into a Corporate Framework. One Person Company is a hybrid of Sole-Proprietor and Company form of business, and has been provided with concessional/relaxed requirements under the Act.

Section 2(62) of the Companies Act, 2013 define “one person company” as a company which has only one person as member. OPC is a sub – domain of Private Company as per Section 2(68).

Rule 3 of the Companies (Incorporation) Rules 2014 say, only a natural person who is an Indian
…show more content…
Advantages of OPC over a Company

1. One shareholder:

This is the main advantage of a One Person Company. In fact, One Person Company is defined in the Companies Act as a Company which has only one member. A single shareholder holds total shareholding.

Who can become a Member?
Only a natural person who is a resident of India and also a citizen of India can form a one person company. It means that other legal entities like companies or societies or other corporate entities cannot form a one person company.

2. One Director:

The other material point is that a One Person Company may have only one director. But at the same time there is no bar on more number of directors. However, as per the Act, the total number of directors shall not be more than 15.

3. Requirement to appoint a Nominee

This is a very important concept where the person forming the One Person Company has to nominate a Nominee with his written consent who, in the event of death or inability to contract of the owner of the One Person Company, shall come forward and take over the management of the one person
Get Access