A One Person Company (OPC) is a common type of corporate structure in which a single individual owns and operates a firm. It is a registered company. Formerly the only manner in which a company might be made available for a single businessman ship was to register his or her firm as a sole proprietor. But, this scenario has lately altered dramatically, and a one person company in india is a new concept that has been developed, in which there is only one person for the trade. It is best suited for persons who want to start their businesses. Here are some of the advantages of establishing an OPC:
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Limited Liability:
The owner of an OPC is only liable to the extent of his or her investment in the firm. This implies that the owner’s assets are not in danger if the firm incurs legal or financial difficulties. All unpleasant events that may occur in a business are always in the name of the entrepreneur, thus it is critical to protect the owner’s assets if the firm encounters a problem or a crisis. When an entrepreneur runs a firm on his own, his assets are in danger if the company suffers a setback or failure. Nevertheless, in the event of OPC, the stockholders’ responsibility is limited to only shareholding the entrepreneur’s personal property, and possessions are secure and unaffected by any losses that the business faces. Reducing liability has made it simpler for entrepreneurs to focus only on business development rather than worrying about the loss of personal property and assets. It has made the business a little simpler and removed some of the stress from the entrepreneur’s head.
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Separate Legal Entity:
Because an OPC is a separate legal entity, it has its own identity that is different from that of its owner. This gives the corporation the authority to engage in contracts, hold property, and sue or be sued in its name. Under this approach, the members do not have any insurable rights on the business’s assets, making it simpler for their entrepreneur to keep his personal property apart from the company’s property and safeguard his security in the event the firm fails. OPCs have grown in popularity in recent years, and major corporations increasingly prefer to do business with tiny OPCs since their accountability and social standing are considerably greater than that of huge corporations. Differentiation between the firm and the entrepreneur has hastened the process of operation and has created a safe place of work for the entrepreneur.
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The simplicity of Formation:
As compared to other types of business entities, the procedure of creating an OPC is comparatively straightforward and uncomplicated. It necessitates fewer compliances and documentation, as well as a reduced incorporation fee. An OPC registered under the Companies Act has many of the same benefits as a farm listed under a private limited company. But the most appealing aspect of an OPC Is that it has a single owner and a higher value, which helps the entrepreneur in both ways since there is less participation of individuals who would be leading the firm, which reduces the complexity and clash of ideas in the business.
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Perpetual Existence:
An OPC has perpetual existence, which implies that the corporation continues to exist even if its owner dies or becomes incapacitated. This maintains the business’s continuance and gives better stability. Its eternal existence is a major reason why OPC has grown so popular in today’s society. The legality of this form of business is relatively simple, and it is also simple to obtain capital from banks and financial organizations. Those with less participation find it simpler to obtain funding and aid in the rapid growth of the firm. Numerous businesses in today’s world have failed as a result of a lack of investment or funding. If they have quick access to liquid cash in the firm they may make many things easier and assist the entrepreneur to overcome many difficulties.
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Tax Advantage
OPCs have several tax advantages, including reduced tax rates, exemptions, and deductions, which can assist in minimizing the company’s tax liability. This tax relief makes it easy and encourages many new startup enterprises to enter the OPC business. Several startup entrepreneurs failed to launch their businesses due to a lack of funding and the inability to bootstrap their firms. This tax relief makes it simpler for them to spend their hard-earned money on business development and execution rather than just draining it into the government’s coffers. This brings up a plethora of new opportunities for the entrepreneur to improve sales and thereby help
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Reduced Compliance Requirements:
Compared to other types of business organizations, OPCs have fewer compliance obligations, which minimizes the burden of compliance and makes the firm easier to operate. All of the exclusions granted have resulted in a lower compliance burden for the entrepreneur. This is beneficial for organizing the unorganized sector of business. In this way, both laborers’ and entrepreneurs’ rights will be protected, and everyone will be able to maximize their efficiency and take the most out of their level of competence. This organized form of OC will open up new avenues for more favorable financial facilities, enhancing investment and scalability of the Small Business.
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Easy return filing and greater credibility:
An OPC is thought to be more reliable and trustworthy than a sole proprietorship or partnership, which may aid in the development of a better reputation and the attraction of new business. Like other businesses, OPC must have its accounts audited and other files completed before the end of the fiscal year. In this scenario, and as with other corporations, the signature of the company’s director is sufficient for filing purposes. There is no need for the signature of the company secretary, which boosts the firm’s speed of operation and efficiency of operation.
Conclusion
Overall, an OPC offers several advantages to entrepreneurs who want to launch their firm with low liability, fewer compliance obligations, and an increased reputation. The owner Is the only relevant authority in India for the registration of one person company. The features listed above demonstrate why OPC has grown in popularity in recent years.