Advantages of One Person Companies
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One Person Company structure of a business comes with several advantages. Some of them are enumerated below:

 

Legal Entity: It is a legal entity created by the process of law. It has wide legal capacity and can own property and also incur debts.

 

Limited Liability: Owner has no personal liabilities. Limited Liability protects the personal wealth of owner therefore owner will never lose more that he has invested. It de-risks the business by transferring the promoter’s liability to the company. Small entrepreneurs who are running their businesses under the proprietorship model could convert to OPCs, with the benefit of limited liability and none of the cumbersome compliance requirements.

 

Stable Form of Business: It enjoys continued existence irrespective of change of ownership. Business continues to exist even when ownership changes. A company can only be closed or wound up through liquidation or by following the process enumerated in law.

 

Easy Funding: On a positive note, OPCs are expected to attract investors who were earlier afraid to take risk in investing in sole proprietorship business because of unlimited liability.

 

Tax Advantages: A Company form of business enjoys more tax – deductible allowances redeemable against its profits.

 

Easy Transferability: Shares of a company are freely and easily transferable.

 

Easy Set Up: It is quite easy to set up a one person company as there is no minimum capital requirement to start and a single person can start a one person company. The business can still stay small – as it has only one owner.

 

Separate Legal Entity: A company is separate legal entity from its Directors and Shareholders and own properties in its own name. Therefore a person can at the same time be a shareholders, director, creditor and employee of the Company.

 

Capacity to Sue and be sued: A company being a separate legal entity can sue and also be sued in its own name.

 

Easy Management & Administration: In OPC form of business owner enjoys complete control over the company. This means owner have direct control over the business, which leads to fast decision making and execution.

 

Lesser Compliance: One Person Company enjoys many compliance exemptions under the Companies Act, 2013, which makes it more attractive form of business. Such as requirement of conducting Annual General Meetings and Extraordinary General Meetings do not apply to an OPC. In case the Board consists of only one Director, then OPC is not required to hold any Board Meeting as well.

 

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