One Person Company is a concept that was introduced under the Companies Act, 2013, to support entrepreneurs who have innovative ideas and the skill-set to run a business on their own. Like a PLC, a One Person Company is also a separate legal economic entity that has limited liability to the individual running it. As the name suggests, only 1 person is required to establish an OPC. At the time of incorporation, 1 individual needs to be registered to serve as the Director of the company. This person can also be the same as the Shareholder of the company. Besides the Director and Shareholder, a Nominee needs to be appointed to replace the Director if he is incapacitated to perform his duties.
Entrepreneurs who wish to form a company with limited liability or Proprietorship Firms looking to get the status of a company can incorporate as a One Person Company. Setting up a One Person Company can reap many benefits:
- The individual serving as the Director is the sole decision maker of the company.
- Since a Nominee is appointed, an OPC has a continued existence. This means that it is unaffected by the death of the Director or change in ownership.
- A One Person Company is relatively easy to set up with minimal paperwork required at the time of incorporation.
- Just like a Private Limited Company, a One Person Company has limited liability to the personal assets of the individual running it.
- After incorporation, an OPC has fewer compliance requirements as compared to other kinds of companies.
Register a One Person Company with All India ITR now! To know all about OPCs including the process, documents required, annual compliances, etc., refer to our guide at https://www.allindiaitr.com/One-Person-Company-Registration-OPC.