The idea of One Person Company (OPC) in India was introduced through the Companies Act, 2013 to maintain entrepreneurs who on their own are capable of opening a venture by allowing them to create a single personality financial entity. One of the major advantages of a OPC is that there can be only one member in a OPC, while a minimum of two members are necessary for incorporating and maintaining a Private Limited Company or a Limited Liability Partnership. Similar to an industry, an OPC is a separate legal thing from its members, offers limited liability guard to its shareholders, has continuity of industry and is simple to incorporate.
Though a One Person Entity allows a single Entrepreneur to run a industry with Limited Liability security, a OPC does have a few boundaries. For example, every OPC must nominate a candidate Director in the MOA or AOA who will turn out to be the owner of the OPC in case the promoter Director is disabled. Also, a OPC must be transformed into a Private Limited industry if it crosses an annual earnings of Rs.2 crores and must file audited economic statements with the department of Corporate Affairs at the end of each economical Year. So, it is important for the Entrepreneur to carefully consider the features of an OPC prior to incorporation. India Filings can help incorporate a One Person Company (OPC) in India.
Separate Legal Entity
A corporation is an official entity and a legal person recognized underneath the Act. So a corporation appearance of association has broad legal ability and can possess property and also acquire amount overdue. The member of a corporation has no legal responsibility to the creditors of a business for such amount overdue.
A corporation has continuous progression, that is continued or nonstop survival until it is officially dissolved. An organization, being a split authorized person, is unaltered by the death or other disappearance of any associate but continues to be in existence irrespective of the changes in relationship.
A company enjoys better avenues for borrowing of funds. It can issue debentures, secured as well as unsecured and can also accept deposits from the public, etc. Even banking and financial institutions prefer to render large financial assistance to a company rather than partnership firms or proprietary concerns.
Easy Transfer ability
Shares of a company limited by shares are transferable by a shareholder to any other person. Filing and signing a share transfer form and handing over the buyer of the shares along with share certificate can easily transfer shares.
A company being a juristic person, can acquire, own, enjoy and alienate property in its own name. No shareholder can make any claim upon the property of the company so long as the company is a going concern.
Limited Liability means the status of being legally responsible only to a limited amount for debts of a company. Unlike proprietorship and partnerships, in a limited liability company the liability of the members in respect of the company’s debts is limited.