Advantages of One Person Company in India – An Overview
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Advantages of One Person Company in India – An Overview

OPC, also known as One Person Company, was created in India by the Companies Act of 2013, an innovative concept greatly relieving many entrepreneurs. According to Section 2(62) of the Companies Act 2013, One Person Company or OPC is a firm comprised of one person who is an individual member. Simply put, it’s an entity registered and managed by a single person. This type of business is suitable for those who are solely entrepreneurs. Sole Proprietorships offer the same benefits. But they are not as secure as Sole Proprietorships, One Person Company has a lower liability, and the legal status of the single company, as well as an increased standing on the market. In this blog, we’ll examine the benefits of a One Person Company in India.

What are the Primary Features of One Person Company in India?
Before we talk about the benefits from One Person Company in India we will discuss the different features that are part of One Person Company:

  1. Anyone or an individual who is registered as a One Person Company is not qualified to be registered OPCs more than once OPC;
  2. The Memorandum for One Person Company must indicate the name of the person, different from the subscriber’s name with their prior written consent on the prescribed form. The subscriber becomes an OPC member after the subscriber dies, or becomes incapacitated to contract.
  3. A Company could be an OPC that requires only one individual as the subscriber to create an entity. A Company will be regarded in accordance with the Companies Act to be a Private Company.
  4. The person named in OPC’s memorandum OPC will not be able to become a nominee of more than one company.

Underlying the Primary Advantages of One Person Company in India
These are the benefits that come with One Person Company in India:

  1. Affordable Security If there is a in the event of death or disability of the single person the company should provide through the appointment of an additional individual to be a nominee director. In the event of the death of the Director who was the first to be appointed The nominee director will handle the affairs of the company up to the time of transfer of the shares on behalf of legal heirs of the deceased member.
  2. Total Control of the company with the single owner This results in quick decision-making and execution. But he or she is able to nominate up to 15 directors to the One Person Company to handle administrative tasks without having to give any shares to them.
  3. Flexibility in tax and savings in the case of a One Person Company, it is possible for a corporation to sign a legally binding contract with its Directors , or Shareholders. As Director, you may receive remuneration, as a lessor, you may obtain rent. As a creditor, you can lend money to the company and get interest, rent, and remuneration as well as interest for Directors are tax-deductible expenses that decrease the profitability of your company and eventually reduce the tax-deductible income of your company.
  4. Limit Liability The concept of limited liability is one of the major benefits that comes with One Person Company. It is not like Private Limited and Public Limited Company The concept of limited liability for OPC in India means that the member’s liability is limited to their participation within the Company. In the case of an OPC (or One Person Company, one person is the sole owner of the shares and has full control over control of the business. Thus, it can be understood that the person’s responsibility will be limited to the amount the amount of money he/she invests in business.
  5. Credit Score:One Person Company with poor credit might be able to get the loan. The credit score for One Person Company will not be significant if the score that is given to One Person Company is as in accordance with guidelines.
  6. Easy funding: One Person Company can raise funds via venture capital or angel investors and financial institutions, among others. One Person Company or OPC One Person Company or OPC can raise funds, eventually becoming an Private Limited Company.
  7. Essential Requirements It is one of the major benefits that comes with One Person Company in India. It is because it must meet the following requirements:
  8. Minimum 1 Director;
  9. Minimum 1 Shareholder;
  10. Minimum 1 Nominee;
  11. Directors and Shareholders can have the same name.
  12. Letters OPC to be suffocated with OPCs’ name to distinguish OPCs from other companies.
  13. The burden of compliance A OPC is a type of Private Limited Corporation that is provided under the section (68) of the Companies Act. Therefore the One Person Company will be legally bound to adhere to the provisions that apply to Private Companies. But, One Person Companies have been granted a variety of exemptions and therefore, have less compliance requirements.
  14. Benefits under Income Tax Law: Any remuneration that is paid to Director is allowed as a deduction, in accordance of Income Tax Law, unlike the proprietorship. Other tax benefits that presumptive taxation can provide are also provided under the Income Tax Act.
  15. transferability of shares It is one of the major benefits for One Person Company. One Person Company has only one shareholder. The question of transferring part of the shares is not a problem since if this happens, the Company will become a one-person business. Transferring all shares is not feasible because it could alter the organization of the Company because the ownership of the Company changes. The issue hasn’t yet been addressed, and knowledge of the law could allow us to understand that in the case of a One Person Company, the transfer of shares isn’t permitted.