What is a one person company?
One Person Company (OPC) is a company incorporated by a single person. The director and member can be the same person. Thus, one person company means one individual who may be a resident or NRI can incorporate his/her business that has the features of a company and the benefits of a sole proprietorship.
Which is better OPC or LLP?
In the case of LLP, no specific minimum paid-up capital required. In OPC, the statutory compliances costs are more. It required to maintain compliance as per the Income Tax Act and the Companies Act. In LLP, the statutory compliances costs are less.
What are the benefits of one person company?
The advantages of an OPC are as follows:
- Safety Net. According to the Companies Act, the liability of the single shareholder in an OPC is limited to the unpaid subscription money in his/her name.
- Succession.
- Market Value.
- Easy Credit Facilities.
- Easier Returns Filing.
- Tax Rate.
- Need for Change.
- Only One.
Can OPC have investors?
Easy Funding It is a company is a private company, OPC can raise funds through venture capital, financial institutions, angel investors, etc. An OPC can raise funds thus graduating itself to a private limited company.
Can OPC be holding company?
Yes, OPC can become a holding company. It cannot become a subsidiary company of any company.
Can OPC have employees?
Since an OPC can have only one shareholder, there can be no sweat equity shares or ESOPs to incentivize employees. ESOPs can only be implemented if OPC converts into a private or public limited company.
Who can join one person company?
Only natural persons who are Indian citizens and residents are eligible to form a one-person company in India. The same condition applies to nominees of OPCs. Further, such a natural person cannot be a member or nominee of more than one OPC at any point in time.
Can we take loan in OPC?
Another advantage of an OPC is the ease of getting loans and perpetuity. “OPCs provide perpetual succession and limited liability to businesses. Options you can avail include taking a personal loan, taking loan against gold or securities or getting a credit card.
How is OPC taxed?
“OPC would typically be taxable at 30% (plus surcharge and cess). Separately, on distribution of profits by OPC to its sole member, OPC would be subject to dividend distribution tax at 20.56%.