Benefits of One Person Company in India

Benefits of One Person Company in India

As the name suggests, a One Person Company is a type of business entity owned by a single person. This type of entity has many benefits and is often preferred by entrepreneurs.

One of the major advantages of a one-person company is that it is easy to raise money from financial institutions and venture capital companies. It also provides more opportunities and limited liability to its owner, which makes it easier for an entrepreneur to take risks without the risk of loss of his personal assets.

Legal Entity & Separate Identity: The main advantage of a one-person company is that the business operates as a separate legal entity from its owner. This allows creditors to pursue their claims against the company rather than its owner.

Credit: This is especially important if the company is new and not well-established. It is not uncommon for companies to have poor credit scores in their early years, but OPCs can still obtain financing.

No Minimum Paid-up Share Capital:  The Companies Act 2013 has not prescribed any minimum paid-up share capital for an OPC. This helps small single entrepreneurs who are currently operating under the proprietorship model, move to the corporate structure with a minimal amount of compliance.

In addition, OPCs have lower capital and turnover requirements and relaxations in the number of board meetings and annual general meetings (AGMs). These benefits can help the small entrepreneur to focus on his core activities rather than the administrative details of the company.

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