Advantages of One Person Company

Here are the 10 reasons why any entrepreneur or business entity should opt for One Person Company. The Advantages of One Person Company are as follows:

  1. A Separate legal entity

OPC is a separate legal entity and capable of doing everything that an entrepreneur would do.

  1. 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.

  1. More opportunities, Limited liability

One of the advantages of One Person Company is that it has more opportunities, limited liability since the liability of the OPC is limited to the extent of the value of the share you hold, the individual could take more risk in business without affecting or suffering the loss of personal assets. It is the encouragement to new, young and innovative start-ups.

  1. Minimum Requirements:

  • Minimum 1 Shareholder
  • Minimum 1 Director
  • The director and shareholder can be the same person
  • Minimum 1 Nominee
  • Letters ‘OPC’ to be suffixed with the name of OPCs to distinguish it from other companies

OPC have to face little compliance burden as compared to private limited companies, hence OPC can more focus on other functional and core areas.

  1. Benefits of being a Small Scale Industries (SSI)

An OPC can avail the various benefits provided to Small Scale Industries like the lower rate of Interest on loans, easy funding from the bank without depositing any security to a certain limit, manifold benefits under Foreign Trade policy and others. All these benefits can be boon to any business in initial years.

  1.  Single Owner

You, only the owner helpful in quick decision-making, controlling and managing the business without following any elongated processes and methodologies as adopted in other companies. The sense of belonging inspires to grow the business further.

  1. Credit rating

The OPC with bad credit rating may even get the loan. The credit rating of OPC will not be material if the rating of OPC is as per norms.

  1. Benefits under Income Tax Law

Any remuneration paid to the director will be allowed as deduction as per income tax law, unlike proprietorship. Other benefits of presumptive taxation are also available subject to income tax act.

  1. Receive interest on any late Payment

OPC avails all the benefits under Enterprises Development Act, 2006. The newly start-up OPC is micro, small, or medium, hence they are covered under this act. As per the Act, if buyer or receiver receives any late payment (receives payment after a specified period), then he is entitled to receive interest which is three times the bank rate.

  1. Increased Trust and prestige

Any business entity that runs in the form of the company always enjoys an increased trust and prestige.

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