One Person Company Registration

one person co

One Person Company (OPC) Registration

One Person Company (OPC) can be formed with only 1 owner, who acts as both the director as well as a shareholder of the company. There can be more than 1 director, but not more than 1 shareholder. It is registered as per the compliance and regulatory guidelines of the Ministry of Corporate Affairs (MCA).

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The One Person Company (OPC) in recent times was launched as a good refinement over the sole proprietorship. In OPC, a single promoter gains full authority over the company thereby restricting his/her liability towards their contributions to the enterprise. Therefore, the said person will be the sole shareholder and director (however, a director nominee is present, but has zero power until the real director proves incapable of getting into the contract). Also, there can be no opportunity for contributing to employee stock options or equity funding. Additionally, if an OPC company has an average hattrick turnover of Rs. 2 crores and over or acquires a paid-up fund of Rs. 50 lakh and over, it has to be converted to a private limited company or public limited company within six months.

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Benefits of OPC Registration

Limited Liability
The directors’ personal property is always safe in a private limited company, no matter the debts of the business.

Continuous Existence
Sole Proprietorship come to an end with the death of the proprietor. As an OPC company has a separate legal identity, it would pass on to the nominee director and, therefore, continue to exist.

Greater Credibility
As an OPC needs to have its books audited annually, it has greater credibility among vendors and lending institutions.