One Person
Company (OPC) has been considered as one of the simplest and low-priced form of
business, with the aim to encourage the entrepreneur to start the business with
single handedly. This form of business was first introduced in India on 2013 by
amending the companies act and giving the new name of Company Act 2013. The
main purpose of introducing OPC to influence the people to start business with
lower income in the form of OPC
Below have
been discussed the key features of OPC in India.
One
person company enjoys the tag of separate entity just like private
limited company and public limited company enjoys. Hence OPC is considered distinct from its owner/members and
is competent of doing legal work that an individual is capable of doing.
- Easy to raise funds from investors
For every OPC it is easier to raise funds from investors as compare to
other private company or public limited company because of its single owner, as
the authority for the entire decision making depends on single owner and does
not required any complications.
- Limited Liability and excess opportunity
In companies act it has been specifically stated
that liability of the owner has been restricted upto a certain limit and hence gives
the exposure to the owners to grab the opportunity and carry on business
accordingly. Therefore it has been support to encourage people to start a
startup in the form of OPC.
- Minimum requirement in
management
An
OPC can be start within the quick succession of time as there is no need to
waste the time for doing formalities related with choosing the appropriate team
to start a business, formalities related with deciding share of the partners. Having
one director, one share holder, makes an OPC an easy organized form of
business.
- Enjoy the benefits of Small Scale
Industries
An registered OPC is eligible to avail
the various benefits of Small Scale Industries, for example lower rate of
interest on loan, easy funding from bank despite of depositing any security
upto a certain limit, various benefits under foreign trade policy. Also these
benefits are essential for the startup in certain stages.
As it has been mentioned in the name an
OPC can be incorporated with single owner and become helpful for controlling,
planning, managing and in prompt decision making without following any rules
and regulation for taking the small decision to carry on a business.
- Benefits under the Income Tax
As per Income tax rule in
India any dividend paid to director will be permissible as deduction along with
the benefits of presumptive taxation in income tax act.
