One Person Company (OPC) is a business structure introduced under the Companies Act, 2013, allowing a single individual to establish a company. It combines the advantages of a sole proprietorship with the benefits of a corporate entity, such as limited liability and legal recognition. Designed to promote entrepreneurship, OPCs aim to simplify the formalization of Micro, Small, and Medium Enterprises (MSMEs) in India.
Benefits
Simple Succession
Limited Liability
Sole Ownership and Management
Ownership of Assets
Why
OPC?
Simple Succession: Allows perpetual succession; a nominee can take over business operations upon the member's death.
Limited Liability: Members’ liability is limited to their shares. Creditors can only claim company assets, not personal assets, even in case of bankruptcy.
Sole Ownership and Management: A single individual acts as both the sole shareholder and director, managing daily operations without needing additional executives.
Ownership of Assets: The OPC, as a separate legal entity, can own real estate and other assets in its name, protected from claims by others.
Advantages of
One Person Company (OPC)
Separate Legal Entity: Protects the founder from personal liability for company losses.
Easy Fundraising: Can raise funds through venture capitalists, angel investors, and banks more easily than proprietorships.
Reduced Compliance: Exempt from certain compliance requirements under the Companies Act, 2013.
Simple Incorporation: Requires only one member and one nominee, with no minimum paid-up capital.
Efficient Management: Single-member structure ensures quick decision-making and smooth operations.
Perpetual Succession: Ensures business continuity regardless of changes in membership.
Documents required for
OPC registration
Memorandum of Association (MoA) and Articles of Association (AoA).
Nominee’s Consent: Form INC-3 with nominee’s PAN and Aadhaar card.
Proof of Registered Office: Supporting documents for the company’s address.
Director’s Declaration: Form INC-9 and consent in Form DIR-2.
Professional Declaration: Certification of legal compliance by a qualified professional.
