Why should entrepreneurs prefer one person company?

  • July 14, 2022
  • Dushyant Sharma
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One person Company is a new venture for Start-ups .OPC can be formed by a single person. This concept which was proposed under the Companies act 2013.Person gets privilege to form a company by making a combination of sole proprietor and entrepreneur. OPC is a hybrid structure of the combination of many benefits of limited liabilities.

OPC is a new concept which will take around few years for expansion between its audience. By the time this will be common between the public then it will have a rapid explore. OPC is an opportunity for those who want to take their business on an international level.

In OPC investors have to deal with only one member which do not create any disturbance amongst idea of Business. The concept of OPC is a success in many of the countries Outside India where people have given their business a drastic growth.

Advantages of OPC

  • Only 1 person can be director or shareholder.
  • Easy to manage continuity and incorporate.
  • Easy to transfer to another person.
  • No professional qualification required to become a director.
  • Confidential sense is provided towards customer and suppliers.
  • Lesser compliance cost.
  • Separation of juristic person and legal entity
  • The company is kept uninterrupted until it is dissolved.
  • Access to credit, bank loan, market, etc.

Also Read: What are the Documents Required For OPC Registration

Steps to form OPC

  • Obtain Digital Signature Certificate.
  • Obtain Director Identification Number.
  • Select the name and make an application to the ministry of corporate affairs office name availability.
  • Sign and file various documents including MOA-Memorandum of association & AOA- Articles of Association with the Registrar of Companies electronically.
  • Pay the Requisite fee and Stamp duty to Ministry of Corporate Affairs.
  • Collect Receipt of Certificate of Registration/Incorporation from ROC.

Disadvantages of One Person Company

  • Setting up an OPC is not an easy task.
  • More Formalities are required as in the comparison of other forms Private Company.
  • Investment in the shares and securities of the corporate which is not a good part for OPC.
  • OPC cannot be converted into the public company or a private company once it has been incorporated.
  • Higher tax rate which causes disinterest to form OPC.

One person company encourages small scale businessman to form company and expand it on a larger scale .OPC has given many entrepreneurs a chance to form their company and built their business with their own name being the director of the company. Business growth is the agenda of every company.OPC keeps the audience confident about the brand.


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Dushyant Sharma
Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.

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