Three unique points about one person Company

| |

The Companies Act, 2013 introduced the new concept of One Person Company (OPC). As the name suggests, an OPC(One Person Company) is a company established by a single person.

A single individual establishes and manages the company. An OPC has all the features of a company, such as perpetual succession, limited liability, and a separate legal entity.

If you wish to start a business in India, you must know about three unique points about one person company type of business entity.

1. Benefits of One Person Company Registration

Separate Legal Entity

OPC enjoys a separate legal entity status, providing protection to the single individual who establishes it. The member’s liability is limited to their shares.,

Thus, it protects them from personal liability for the company’s losses.

Creditors can sue the OPC, not the member or director.

Easy Fundraising

Being a private company, OPC can easily raise funds through venture capitals, angel investors, and incubators.

Banks and financial institutions prefer granting loans to companies rather than proprietorship firms, making it easier to obtain funds.

Simple Incorporation

OPC can be incorporated with just one member and one nominee.

The member can also be the director.

With a minimum authorized capital of Rs. 1 lakh and no minimum paid-up capital requirement, OPC is easier to incorporate compared to other company forms.

Understand about it in detail at: Difference Between OPC and Private Limited Company

Easy Management

With a single person at the helm, managing an OPC becomes straightforward.

Decision-making is quick, and resolutions can be easily passed by the sole member, minimizing conflicts or delays.

Perpetual Succession

OPC continues its existence even if there’s only one member.

The member appoints a nominee while incorporating the OPC, ensuring that the company continues to operate in the event of the member’s demise.

2. Understand about OPC Liability in India

  • An OPC enjoys the benefit of a separate legal personality, protecting the sole member from the company’s liabilities.
  • However, this protection is not absolute. If the shareholder engages in fraudulent activities or misappropriates company assets, the corporate veil can be pierced.
  • This is similar to private companies, where the corporate veil is disregarded in cases of fraudulent transactions.
  • If the sole member of an OPC misuses company assets, evades the law, makes contracts in their own name instead of the company’s, fails to maintain a separate bank account for the company’s finances, or withdraws money for personal use, they can be held personally liable for any resulting debts and losses.
  • In such instances, the protection of limited liability is set aside.

Document Requirement for One-Person Company Registration

  • Identity proof of the director and nominee
  • Address proof of the director and nominee
  • Memorandum of Association (MOA)
  • Article of Association (AOA)
  • Consent of the nominee
  • Digital Signature Certificate (DSC)
  • Director Identification Number (DIN)
  • Name approval
  • Incorporation form
  • Incorporation fees

Take a call from Expert

Difference Between OPC and Private Limited Company

Moreover, If you want any other guidance relating to Three unique points about one person Company, please feel free to talk to our business advisors at 8881-069-069.

Download E-Startup Mobile App and Never miss the latest updates narrating to your business.


GST RCM: Clarification on Services by Directors to Companies

GST on Hostel Rent & PGs


Leave a Comment