The concept of One Person Company in India was introduced through the Companies Act 2013.Though a One Person Company allows Entrepreneur to operate a corporate entity with limited liability protection. One Person Company (OPC), can be formed by a single person The One person company is juristic, and liability of members is limited to their shares. OPC gives a single director to enjoy full control over the business. if an 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, mandatorily to be converted into a private limited company or public limited company within 6 months.
A Private limited company registration is governed by the Ministry of Corporate Affairs, Companies Act, 2013 and the Companies Incorporation Rules, 2014.Some of the unique features of a private limited company like the 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 type 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 company formation, subject to the government processing time and the client document submission.
The life of a business is not affected by the status of shareholders and even after the death of the shareholder, the OPC continues to exist.
OPC books & accounts audited annually, it has greater credibility among vendor, customers, employees and bakers.
One person company is only corporate entity which can be started and operate by a single promoter which provide fully control over the business of a single person.
Liability of Directors of the one person company is limited to their shares. That means if the company suffers from any loss and faces financial crisis then the personal assets of shareholder / Member / Director will not be at risk of being seized by bank, creditors, and government.
Ownership one person company can be easily transferred by transferring shares. In a one person company, the ownership can be transferred by altering the shareholding, directorship and nominee filed by director.
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