One Person Company is a business entity in which there is only one owner with limited liabilities who can act both as a shareholder as well as the director. The concept of OPC is basically to eradicate the limitation of a sole proprietorship, which is the most popular form for small businesses in India. The liability of owner is limited to the invested capital in this form.
If you independently want to commence your business without involving any other person, then One Person Company (OPC) is the ideal choice for you.
When OPC concept was not introduced in India, people used to choose Proprietorship as their form of business. Proprietorship has many disadvantages like:
-One cannot take investments
-No legal existence
-Moreover, many other as well. Further proprietorship as a kind of business is not considered trustworthy in India anymore. One Person Company (OPC) is a solution for all the above problems.
One Person Company has following features and restrictions: 1) It allows a significant degree of separation between operations and ownership.
2) Less compliance is needed as compared to a private limited company.
3) It is useful for small entrepreneur to directly access target market.
4) Banking and financial institutions prefer to lend money to the company instead of proprietary firms.
5) It makes decision-making process much faster because of single ownership.
6) The owner can anytime convert OPC to a private limited company with ease.