The Introduction of One Person Company (OPC) in India was a historic moment for Sole –proprietor. The main aim of introducing the concept of One Person Company is to enable the Entrepreneurs/Businessman to carry their business in the Proprietary form to enter into an organised corporate framework.
One person company is an organised form of Proprietorship which can by formed individual. In a proprietorship, the individual has unlimited liability whereas, In OPC, Individual enjoy Limited Liability. OPC enjoys the benefits of both proprietorship and Company as the OPC enjoys the Limited Liability, Single Decision Making & Perpetual Succession. Thus, One Person Company is a combination of Proprietorship and Company form of business.
Similar to other constitution, OPC also has some limitations like every OPC must appoint a nominee Director in the MOA or AOA who will become the owner/possessor of the OPC in case the promoter Director is disabled. Also, an OPC must be converted into a Private Limited Company if it crosses an annual turnover of Rs.2 crores. OPC cannot raise it Paid-up Capital to more than 50 Lacs. OPC has to file audited financial statements with the Ministry of Corporate Affairs at the end of each Financial Year.
PAN Card of proposed Directors
No Objection Certificate (NOC) from the owner
Latest photograph of the proposed director
Latest photograph of the Nominee
Electricity / Water / Telephone Bill / Bank Account Statement of the proposed director
Electricity / Water / Telephone Bill / Bank Account Statement of the proposed nominee
Limited Liability is the condition where shareholders are liable for the debt of the company to the extent of nominal value of shares hold by them. If any person claim or sue company for any debt, then the person is suing the company not the owners of the company.
Company will not be affected with the change of Director or death of any member. It is continuous existence of Organisation despite of any changes.
Transferability of Shares
The Shares of the company are easily transferrable by a shareholder to another. However, restrictions imposed in AOA to be considered.
Legal Formality is less in comparison to Private Limited Company and Public Limited Company.