One Person Company is a company that comprises a single person as a shareholder and can be contrasted with private companies. These companies get all the benefits of a private company such as they to have access to credits, bank loans, limited liability, legal protection, etc.
What is One Person Company?
As per Section 2(62) of the Companies Act, 2013, One Person Company is a company that comprises a single person as a shareholder and can be contrasted with private companies. The members of a company are nothing but subscribers to its Memorandum of Association (MoA), or its shareholders. These companies get all the benefits of a private company such as they to have access to credits, bank loans, limited liability, legal protection, etc.
It is to be noted that private companies comprise a minimum of two members. Apart from One Person Company mode, an individual can get into the business through a sole proprietorship mode too.
As per Ministry of Corporate Affairs, there were 34,235 One Person Companies out of a total number of about 1.3 million active companies in India, as of 31 December 2020.
Features of One Person Company
1- An individual can form a company for any lawful purpose. As per the Companies Act, 2013, OPCs are private companies.
2- While registering the company as OPC, an individual is required to mention a nominee.
3- In case of the death of the owner of OPC, the nominee has the right to choose or reject to become the sole owner of the company.
4- OPCs can have a maximum of 15 directors.
Benefits of One Person Company
1- In the case of One Person Company, the person and his company are considered as separate legal entities.
2- The owner of the company is not liable to repay the debts of the company.
3- OPCs can raise equity funding and are eligible for government schemes.