Why You Should Start a One Person Company: Top 5 Benefits

  • June 06, 2024
  • Dushyant Sharma
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As the name suggests, One Person Company (OPC) is the kind of company which has only one member or shareholder as its owner. Many people choose to open OPC since it has certain advantages. 


In this article, we will discuss the top 5 benefits of OPC. If you’re wondering why you should start a One Person Company, reading this article might be helpful.

Concept of One Person Company (OPC)

Before the Companies Act, 2013, the One Person Company (OPC) business model was unknown to the people in India. It was after this Act was passed that One Person Company’s concept was introduced in India. 


To explain it simply, One Person Company (OPC) is a form of company which requires only one person as its subscriber to form it. Such a company, under the Act, is considered as a private company. 


When a person gets their company registered as an OPC, they’re not allowed to incorporate more than one OPC at the same time. The name of the person other than the subscriber, with his prior written consent in the prescribed form, who will become OPC’s member when the subscriber dies or is incapacitated to contract, must be indicated in the OPC’s memorandum. The nominee mentioned under the OPC’s memorandum is not allowed to become a nominee of more than one OPC.

Benefits of One Person Company (OPC)

Now, let’s discuss the top 5 benefits of OPC.

Easy Incorporation of the Company

One of the major benefits of OPC is the SPICE+ application that is required for incorporation. A one person company can be easily and quickly incorporated due to the SPICE+ application process which is completely online.  


The time and effort required for the OPC application procedure have been significantly decreased as a result of this application form. All-inclusive OPC formation services are offered by the SPICe+ application. This application can be used for both the OPC's registration and its name approval. In addition to registration, the form has other connected forms for creating an OPC current bank account, ESI registration, EPF registration, and GST registration.

Perpetual Existence of the Company

An OPC continues to exist even after the death of its only member or shareholder. If the OPC has a nominee, then such a nominee will take over the OPC as its owner. This is actually an obligation. An individual, upon becoming the owner of an OPC, is immediately required to select a nominee who would be succeeding him as the new owner of the OPC, in the event of his demise or his permanent departure.


A nominee can be any individual chosen by the owner of the OPC, and need not necessarily be his legal heir or family member. However, it is important to note that no person can be appointed as a nominee by the owner, unless he gives his consent for the same. The consent of the nominee is required to be intimated to the Registrar of Companies (ROC).

Sole Ownership of the Company

One of the major benefits of OPC is the sole ownership which comes with it. An OPC, under the Companies Act 2013, is defined as a private limited company which is owned by one person. This one person is entitled to hold all the company’s shares and also meet the entire capital requirements of the company. As this person is the sole investor of the company, they receive all the company’s profits as their returns on investment.


The sole ownership that comes with OPC allows for a streamlined decision making process for the company and the only owner gets the full authority for the OPC’s decisions. The owner doesn’t need someone else’s approval regarding OPC’s decisions. 

Limited Liability of Owner

Limited liability is another benefit of having a One Person Company. This benefit makes it stand out against other single owner businesses such as sole proprietorship. 


When it comes to sole proprietorship, the owner’s liability is unlimited. However, the owner of an OPC has limited liability. How come, you wonder? Well, the OPC’s sole owner is entitled to receive all the income earned by the company but when it comes to their liability, they’re only liable to pay off the company’s losses and debts restricted to the unpaid amount of capital which they have subscribed to.

Easy Credit Facilities & MSME Benefits

OPC is a legally incorporated entity. Therefore, its details and documents are available for public viewing and inspection on MCA’s official website. This means that all the credentials with which an OPC operates or applies for credit can be verified properly. As a result, an OPC is considered as credible and reliable and can avail institutional credit facilities easily, without any hassle.


Small-scale firms, sometimes known as one-person companies, may be eligible for registration under the MSMED Act as Micro, Small, and Medium Enterprises. The company's annual investment and turnover caps are used to determine if it meets the requirements to become an MSMEs. More specifically, during a financial year, the cap on turnover cannot exceed Rs. 250 crores, while the cap on capital investment cannot exceed Rs. 50 crores. 


One Person Businesses can take advantage of numerous government-provided perks to encourage and assist the expansion of MSMEs once they register as such. Low-interest loans, loans without collateral, pro-foreign trade policies, and credit facilities with no restrictions on the amount of securities deposited are a few examples. 


The benefits of OPC have been listed in the article. The biggest benefit is that the OPC belongs to only one person who does not need to share his profit with another person. That’s the reason why many people choose to get OPC registration. Although many people seem to find the business model of OPC similar to Sole Proprietorship, it is important to remember that an OPC has limited liability unlike in the case of Sole Proprietorship. 


Ultimately, it’s your call on the type of business model you want to choose for your company. However, professional advice might help you if you’re confused. If you need our professional advice or need assistance in the OPC registration process, you can get in touch with Registrationwala.

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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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