One Person Company (OPC) Registration
What is a One Person Company (OPC) ?
Section 2(62) of the Companies Act, 2013 revolutionized the Indian market by providing legal recognition to single person entities. Any company with one shareholder, registered under OPC, will be considered as a separate economic entity having perpetual succession. This elevated the importance of entrepreneurs and small traders by acknowledging their contribution to the economic growth.
It's a preferable structure for micro-businesses as a single person holds all decision-making responsibilities. It provides limited liability and greater growth opportunities, with minimal compliance.
Benefits under OPC Private Limited Company Registration
- Recognized as a separate legal entity, the company can own, acquire and alienate, property under its name, like an individual.
- Limited liability of owner protects his personal assets from loss or other risks.
- Procures good and reliable investors.
- It's easier for an OPC to avail financial assistance from banks or other institutions.
Limitations of OPC
- A One Person Company is prohibited from carrying out any Non-Banking Financial Investments activities, greatly limiting the investment options.
- An individual is not allowed to own, or be a nominee of, more than one OPC.
- The Income Tax Act, 1961 doesn't recognize OPC, placing it in the same tax slab as a private company under the bracket of 30% (plus charges) on total income. Not being taxed at the rate applicable to individuals becomes a major limitation for an OPC owner.