What Are The Top Advantages Of One-Person Companies?

ByAlina Wilson

One person company was introduced in the new Company’s Act 2013 and is considered to be a new concept which brought a great amount of relief among many entrepreneurs. It can be considered as a company which has only one person as the main member and he will be the shareholder as well as director at the same time. 

 The overall process of incorporating the one person company is very easy and people simply need to follow some of the few steps so that they can get the formalities done and can avail themselves several kinds of advantages. 

Following are some of the very basic advantages of the one person company: 

  1. The one person company will be considered as a separate legal entity in the eyes of the law and the company will be having a common seal as well as a perpetual succession. It will get the authority to exercise different kinds of functions of the incorporated person.

  2. The concept of one person company in India will also be based upon limited liability and liability of the person will always be limited to the extent he or she has invested into that particular business which will further make sure that there will be a higher level of security to the personal assets of the concerned people.

  3. One person company also comes with one separate property system because it can gain through its own identity and will be functioning as a separate legal entity. Hence, one person company can become the owner of different kinds of assets and the members won’t be having any kind of insurable rights in the assets of the companies.

  4. One person company will also be enjoying the advantage of only one shareholder and the issue of transferring a portion of the share will not arise because there won’t be any kind of need in such cases.

  5. OPC can even make a valid contract with its shareholders and the directors which will make sure that director will be receiving the remuneration and as a creditor one can even advance money to your own company and have a good amount of interest from it. The director’s remuneration, rent and interest will be the deductible expense which will help in reducing the profitability of the company and ultimately will bring down the taxable income of the business. Hence, the one person company will be enjoying several kinds of tax-related advantages along with multiple savings.

  6. One person company will not be facing any kind of interference because it will be completely controlled and managed by a single owner which will help in making sure that there will be very quick decision making along with very easy and faster execution of the things. The sense of belongingness will always motivate the person to grow the business further and further.

      The one person company is considered to be one of the most important business structures in the whole world because of all the above-mentioned advantages enjoyed by the OPC Company.