Benefits of One Person Company in India

Benefits of One Person Company in India




One Person Company has become a popular choice for small entrepreneurs as it provides them all the benefits of a private limited company without having to pay higher compliance fees. As a result, a large number of companies have started incorporating as One Person Company in India and have been enjoying various benefits such as access to credit, bank loans, legal protection, etc.

A One Person Company is a private company that has only one member or shareholder. It is a business entity that has been incorporated under the Companies Act 2013. As per the Company's Act 2013, a person or company can incorporate a One Person Company if he is an Indian citizen and resident in India.

The main advantage of a One Person Company is that it offers a legal identity, which can be beneficial for any business. This gives a sense of credibility and social recognition to the company, which in turn helps the business to build trust among its suppliers and customers. It also helps a company to attract qualified and experienced workforce.

In addition, the One Person Company can also be registered as an MSME and it will have a higher priority under the MSME Regulations 2012. It is important to note that the One Person Company has some limitations when it comes to compliance. For example, the OPC has to nominate a nominee director in the AoA and MoA of the entity in case its sole director is disabled.

The biggest advantage of the OPC is that it has lower capital and turnover requirements as compared to other companies in India. In fact, the government has relaxed the norms regarding One Person Company in the Union Budget 2021-22, allowing them to grow without any restrictions on paid-up capital and turnover.

As a result, the government introduced this idea to allow more small businesses to be established. The One Person Company is a new entity that can be formed with a single director and one member (both can be the same person).This form of corporate structure is suitable for any business that wants to be in the market without paying any kind of registration fees. It has a simple registration procedure and it can be registered within 120 days of the incorporation.

Aside from that, it has a reduced compliance requirement than the other types of companies in India. This is because it requires less paperwork and is easier to manage.

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