One Person Company is a business entity in which there is only one owner with limited
liabilities who can act both as a shareholder as well as the director. The
concept of OPC is basically to eradicate the limitation of a sole
proprietorship, which is the most popular form for small businesses in India.
The liability of owner is limited to the invested capital in this form.
If you independently
want to commence your business without involving any other person, then One Person
Company (OPC) is the ideal choice for you.
When OPC concept was not
introduced in India, people used to choose Proprietorship as their form of
business. Proprietorship has many disadvantages like:
-One cannot take
investments
-No legal existence
-Unlimited liabilities
-Moreover, many other as
well. Further proprietorship as a kind of business is not considered
trustworthy in India anymore. One Person Company (OPC) is a solution for all
the above problems.
One Person
Company has following features and restrictions:
1)
It allows a significant degree of separation between operations and ownership.
2)
Less compliance is needed as compared to a private limited company.
3)
It is useful for small entrepreneur to directly access target market.
4)
Banking and financial institutions prefer to lend money to the company instead
of proprietary firms.
5)
It makes decision-making process much faster because of single ownership.
6)
The owner can anytime convert OPC to a private limited company with ease.
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