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One Person Company (OPC) is a type of business entity that allows a single
individual to operate a company with limited liability. The concept of OPC is
designed to provide the benefits of both a sole proprietorship and a company
structure. It was introduced to encourage individuals, entrepreneurs, and small
business owners to start their own businesses with the flexibility and
protection of a corporate structure.
Here are some key features of a One Person Company:
Single Member: As the name suggests, an OPC is formed with only one person as its member and shareholder. This individual holds the entire ownership of the company.
Limited Liability: Similar to other types of companies, one of the
primary advantages of an OPC is that the liability of the member is limited to
the extent of their contribution to the company's capital. Personal assets of
the member are generally protected from the company's debts and liabilities.
Separate Legal Entity: An OPC is a distinct legal entity separate from its
owner. This separation provides legal protection to the individual's personal
assets, and the company can own property, enter into contracts, and sue or be
sued in its own name.
Nominee Director: To ensure continuity in case the single member
becomes incapacitated or dies, an OPC is required to appoint a nominee director
in the Memorandum of Association. The nominee director takes over in the event
of the member's death or incapacity.
Conversion: If the OPC grows and the owner wishes to convert it
into a private limited company, it can be done, subject to certain conditions.
This allows for scalability and flexibility in the business structure.
Annual Compliance: OPCs are required to comply with certain statutory
requirements, such as filing annual financial statements and returns with the
regulatory authorities. However, the compliance burden is generally lighter
compared to larger companies.
Minimum Capital Requirements: There is no minimum capital requirement for the
formation of an OPC, making it easier for individuals to start a business
without the need for significant initial investment.
Browse practical answers curated by our CA and CS desks for ONE PERSON COMPANY.
Any individual who is an Indian citizen and resident can form an OPC. It’s ideal for solo entrepreneurs.
OPC offers limited liability, full control by the owner, and easier compliance than other company structures.
You can register an OPC by submitting documents such as proof of address, identity, and the company’s name to the Ministry of Corporate Affairs.
There is no minimum capital requirement for an OPC, but the authorized capital must be mentioned during registration.
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