If there is only one promoter/founder, One Person Company (OPC) is the best way to start a company. OPC is one of the significant milestones of the Companies Act, 2013, introduced to encourage self-employment with a backbone of India’s legal system. And therefore One Person Company (OPC) is a concept where a single person forms the company. The statute defines OPC, in Section 3(1) of the Companies (Incorporation) Rules 2014, where a natural person who is an Indian citizen and resident in India shall be eligible to form an OPC. Also, at the time of incorporation, the sole member has to appoint another person as his nominee and his name shall have to be mentioned in Memorandum of Association of the OPC.

All unfortunate events in business are not always under an entrepreneur’s control; hence it is important to secure the personal assets of the owner, if the business lands up in crises. While doing business as a proprietorship firm, the personal assets of the proprietor can be at risk in the event of failure, but this is not the case for a One Person Private Limited Company, as the shareholder liability is limited to his shareholding. This means any loss or debts which is purely of business nature will not impact, personal savings or wealth of an entrepreneur.

One Person Company is a Private Limited Structure, this is the most popular business structure in the world. Provide suppliers and customers a sense of confidence in business. Large organizations prefer to deal with private limited companies instead of proprietorship firms.

Pvt. Ltd. business structure enjoys corporate status in society which helps the entrepreneur to attract quality workforce and helps to retain them by giving corporate designations, like directorship. These designations cannot be used by proprietorship firms.

This leads to fast decision making and execution. Yet he/she can appoint as many as 15 directors in the OPC for administrative functions, without giving any share to them.

Banking and financial institutions prefer to lend money to the company rather than proprietary firms. In most of the situations Banks insist the entrepreneurs to convert their firm into a Private Limited company before sanctioning funds. So it is better to register your startup as a One Person private limited rather than proprietary firm.

OPC is one of the easiest forms of corporate entities to manage. Very few ROC filing is to be filed with the Registrar of Companies (ROC). No need to conduct Annual General Meeting (AGM).