What is a one-person company, and is it better than a private limited company in India?

About One Person Company (OPC): A registered company provides corporate status and many benefits to the members and directors. But, to register a Private company at least two members are required. To eliminate this drawback and allow single person to reap the advantages of company structure, it One Person Company is introduced through Companies Act, 2013. This registration is simplified with online filing process.

Distinctive feature of this organisation is that it has only one shareholder who owns 100% stake of the company. To maintain the character of perpetuity, appointment of nominee is compulsory, who will take place of owner in case of death or his inability. One person company falls under category of small companies and is a type of Private Limited Company.[1]

What is better?

Like any other business organisation, OPC also has few drawbacks. But while comparing it to Private Limited Company, the main drawback I see it cannot accept equity investment as there can only be one shareholder.

Further, this structure is designed for small businesses. On reaching to prescribed threshold, it has to covert into Private Limited Company. At the same time, the small and medium scale businesses can work seamless with lower compliance although being part of the corporate world.

On the other side, it is best for those who do not want to share their business stake with partners i.e. the sole individual is also allowed to footstep into corporate structure.

Choosing the right structure from type of organisation also depends on the business activities and related matters. For different scale or business, both organisations may be appropriate.

To choose the right structure, take help of the experienced professional, who can guide you on such matters.

For Online One Person Company (OPC) Registration in India or choosing a right structure, get in touch with an expert. Call us at 1800–313–4151 or simply drop an e-mail at Support@LegalWiz.in.

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Footnotes

[1] Online One Person Company (OPC) Registration in India