One Person Company (OPC) Registration

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What is One Person Company?

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One-person company is the best enterprise for those individuals who do not like to work under others and are looking for the benefits of the private limited company. One-person company is the most recent to the type of business entities that there are. It has also gained wide popularity during the recent years. After the private limited company, it has become one of the most sought-after entity to start one business. It is an enterprise which we can say has the benefits of the both the sole proprietorship and that of private limited company.

We can say that it was created to combine the best parts of both the sole proprietorship and private limited company. Moreover, it has successfully blended their advantages into a one single entity. Furthermore, it is an enterprise for the people who believe in single handily managing the business.

One of the best enterprises when we see that under the head of small enterprises. If we see the data of all the small enterprises, we will find that even though immensely popular, it still lags behind when we come down to numbers. In the number of small enterprises being established, sole proprietorship still leads because of no cost of establishing and having the most-easy form of set-up.

But we also note that, one-person company is a major upgrade over sole proprietorship because it has numerous advantages such as limited liability, separate legal entity just like the private company. It is gaining popularity but because sole proprietorship does not need any hard and fast compliances, and has an easy set-up with literally no cost of setting-up, the one-person hence lags behind when it comes to sheer formation and establishment of the entities in the market.

We also note that there are many disadvantages of the one-person company, such as, all the load of management falls on the shoulders of a single person. This is great disadvantage because there are numerous legal compliances as compared to the sole proprietorship and hence it is quite not possible to carry out the management of the whole company while also fulfilling the legal compliances. But nevertheless, one-person gaining immense popularity.

The concept of One Person Company in India was introduced through the Companies Act 2013. Though an OPC allows an entrepreneur to operate a corporate entity with limited liability protection. One Person Company (OPC) registration can be done by a single person and it is juristic and liability of members is limited to their shares. OPC gives a single director to enjoy full control over the business. If a One Person Company cross an average turnover of over Rs. 2 Crore over three years or has a paid-up capital of over Rs.50 Lakh, it is mandatorily to be converted into a private limited company or public limited company within 6 months.

A one person company (OPC) registration is governed by the Ministry of Corporate Affairs, under Companies Act, 2013 and the Companies Incorporation Rules, 2014. Some of the unique features of an OPC company are like limited liability protection to shareholders, the ability to raise the equity funds, separate legal entity status and the perpetual existence make it one of the most recommended types of business entity for small and medium-sized businesses that are owned by families or professionally managed.

It takes 10-12 working days to complete one person company registration procedure, subject to the government processing time and the client document submission.