What are the Advantages and disadvantages of OPC registration
Hemlata Khandelwa / 2021-05-07 09:02:20

What are the Advantages and disadvantages of OPC Registration?

Advantages and disadvantages of OPC Registration:

OPC is a new concept in India; it is very popular overseas, including Singapore, to the USA, even Europe. Currently, it is a gray area, and it will tell on time how well it will work in India-

  1. Only a physic character that is an Indian and resident in India-
  1. A person will be available to join the company;
  2. A person will be selected name for a single/individual member of the company

Highlights features of a One person company:

  • The company can be One-person-company (OPC), which requires a person customer to make an organization and the company will be a remedy as un-official company under the Act.
  • A person who registers a one person company is not worthy of include more than one person-company.
  • The form prescribed in the OPC memorandum must name a person (other than the customer) with his prior written consent, who will become a OPC member if the client is incapacitated for the contract or agreement.
  • A nominee for the memorandum of an organization/firm shall not be cupules’ to happen a nominee for many companies. There has many Advantages and disadvantages OPC registration

What are the Advantages and disadvantages of OPC registration?

Now, first we go to read about the advantages of OPC registration in India:

One Person Company Advantages

One-person-company (OPC) has several advantages over companies and proprietorship firms.

A. Burden of compliances:

The definition of "private limited company" given under part-2 (section) (68) of the Companies Act, 2013 includes OPC Company. It is expected with one person-company to observe the provisions exercisable to private companies. Mostly, on-person-companies are accepted diverse rebates, and here upon their adherence load is low.

B. Proprietorship Company consolidated sector:

OPC will fetch the not organized sector of ownership/partnership into a unified rendering of a private limited company. Multiple SMEs, doing merchandise as sole proprietors, can enter the corporate domain. The consolidated rendering of OPC will evidential the way for many compatible banking things. The employer always has endless liability. If such of the owner’s observance business through the OPC, the members care/liability is moderate is limited.

C. Least Requirements:

  • It will require a shareholder of at least one
  • It will require a director of at least one
  • Directors and shareholders can be the same person
  • It will require a nominee of at least one
  • There has No limit of minimum share capital that has to be a requirement they can start without share capital.
  • The letter will be affixed to OPC's name to distinguish OPC from other companies.

D. There has Limited Liability/Responsibility for Shareholders and Directors:

  • The majority significant account for stake-holder to register a 'One-person company' is, of course, the desire for limited liability.
  • All hapless events in merchandise are not ever below the mandate of a laborious; therefore, it is important that if the commerce declines then the personal wealth of the owner is protected.
  • While market as a proprietary firm, the respective fortune of proprietor may Be at peril in the taper of failure, but not so for As a liability/care of a personal private limited company shareholder is limited to its shareholding. This means that any loss or loan purely commercial in nature will not affect the individual savings or money of the entrepreneur.
  • If merchandise is not able to clear dues, then in case of sole proprietorship the person must pay such dues; and not a fellow responsible for such liabilities in the capacity a company.
  • It is provided by OPC entrepreneurs the profit of limited liability wherefrom the member's liability will be limited to the honorary fund of membership. These advantages/profits are not receivable in the concern of sole master hood.

E. Social and legal recognition for commerce:

An OPC company is a private limited structure; it’s a major part of the sought-after structure of business in the world. Provide the suppliers and clients a sense of faith in the business. Great organizations pick to bargain with private limited companies rather than master-hood firms. A Pvt. Ltd. business fabrication enjoys a corporate capacity in the community that helps the entrepreneur charm merits employees and helps those retain them by directing corporate prefix. These titles cannot be used by proprietorship firms.


In the affair of departure/disability of the sole person, the nominee should be provided through the appointment of another person as the director. Upon the demise/death of the director, the named/nominated director will be managing the works till the date of company’s devolution of stake to the legitimate heirs of that member.

G. It is easy to get bank- loans

The business conducted and serviceable by the bank that is preferred to the loan to the organization nay to possessive firms. Most of the situations, banks insist on converting entrepreneurs into private limited companies before sanctioning funds. So it is a good and better idea to get OPC registration of your startup under One Person company nay than as a possessory firm.

 H. Finished controller with the company of the singular owner:

This leads to faster decision-making and execution. Nevertheless, he can appoint more than 15 directors for administrative functions in the OPC, without giving them any share.

I. Easy to do:

 No requirement is there hold an annual or extraordinary meeting: only the proposal will be communicated by Company fellow and recorded in the minute book and signed and dated by the member and such date shall be deemed to be the date/day of the meeting.

  • Quorum: section 174 provision of (for board meetings) sittings not enforce to a private organization/company, they has only one board of director’s director.
  • Board meeting: An individual company may catch rare one board sitting of directors in every half of a annual year and the various amid the deuce meetings shall not be short than (90) ninety days.
  • Minutes: Where there has less than two directors in the company, all the business occurring at the board sitting transactions will be recorded in the minute book created under section 118. In this case, no requirement is there hold a board meeting.

J. Fill with ROC:

  • The Form need to be filed/submitted with the Registrar-of-Companies
  • Mandatory rotation of the auditor does not apply after the expiration of the maximum period.
  • Sections 98 and 100 to 111 provisions are inclusive relating to the catching of general sitting shall not enforce to a private company.

K. Finished the Success:

An OPC is a corporate body that will also have permanent succession facilities and will help entrepreneurs to raise capital for the business. OPC is a mock being separate from its owner. Therefore loaners should be well-informed in order that their claim against the trading cannot be oblate against the employer.

L. Flexibility of tax and Savings

It is eventually for OPC Company to enter into a contract that is valid with the directors or stake-holder. This means that as a company director, you can also take remuneration and rent as an owner, You can grant some-one your money to company as a creditor and earn interest on it. Directors' remuneration, interest, and rent are able to be deducted expenses that reduce the beneficial of the company and finally the tollable revenue of your business.

Now we are come to talk about the losses/disadvantages of OPC company registration in India.

What are the Disadvantages of registration of one Person Company in India?

There have many advantages and losses/disadvantages of OPC before this we read about the advantages/profits of OPC now we are talking about the disadvantages of company.

Disadvantages/Losses of one-person company:

  1. Member:
  • A one-person company can have a minimum or maximum number of 1one members.
  • The minor (the person under the age of full legal responsibility) will not be conferrable becoming a member/nominee of a company or may hold a stake with a beneficial interest.
  • Only a person who is natural and is a citizen of India and an Indian resident, that person will be eligible to join the company and one person will happen a nominee for the exclusive genre of the firm.
  1.  Suitable for small business only:

This company registration Opt for a short business. The OPC can have a maximum capital of Rs fifty lakh or a turnover of Rs 2 crore. Otherwise, it is to be required for OPC to be transferred into a Pvt. Ltd. company.

  1.  Activities of business:
  • An individual Company can’t do non-banking financial investment activities, cum input in any securities corporate.
  • Below section 8 of the Act, a personal company can't be unified or modified into a firm.
  1.  Perfect Success:
  • It is the much belief of a distinct legal being is build for a permanent legal succession that challenges the continuation of the company even after the death or retirement of a member. Because the nominee, whose title is described in the MOA, will happen a component of the set-up in the incident of the departure of the present member.
  • While it is suspected that this will do a peace for the organizations as not a fellow/employ of the organization is also not a part in the day-to-day operations of the firm, the member will not be able to succeed in the business after death.
  • Although the act extends the exemption to an individual company in terms of AGM, EGM, the quorum of meetings, banning the right to vote, or filing their financial statements, there is still a lot of paperwork to be done to include such a company requires a single owner.

These ways of doing something complication in relation to the inclusion of the OPC may combine substances this general notion less circean to sole entrepreneurs.

  1.  Development and Control of:
  • This is the characteristics of the company which has been seriously challenged by the new Companies Act, 2013, where the line between ownership and control is blurred.
  • Resulting in unethical business behavior.
  1.  Other discounts:
  • A person will not be capacitating to join more than one company or be nominated in more than one company.
  • NRIs are not allowed to join One-person-company.
  • A person is expected to employ a designated person to include the company:

This article is finished here in which you may learn about the Advantages and disadvantages/losses of OPC company registration and India. If you want to open an-another company like Limited Liability company registration in India.

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