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One Person Company Registration is a forward-thinking concept that promotes the incorporation of micro, small, and medium-sized businesses and persons with entrepreneurial dreams but doesn't want to involve resources or means to get more partners to execute the business plan.
The advantages of one person company are that it provides a legal entity to the sector of proprietorship, and apart from that, it gives all the benefits of a company like credit, bank loans, limited liability, access to the market, and legal protection to individual entrepreneurs. Let us understand the benefits of a one person company in brief.
One Person Company is an elevated version of the Sole proprietorship business model. Where you can register one person company under the provisions of the companies Act 2013 and the rules thereto, where it was made possible for a single person company to act as a company without the complexity of having partners. Such encouraging more people to come forward to start a business.
Let us further look at the benefits or advantages of One Person Company Registration in this article.
Limited Liability Protection: The most vital reason for shareholders to include the ‘single-person company’ is certainly the will for indebtedness.
An OPC gives the benefits of indebtedness to entrepreneurs whereby the liability of the member is going to be limited to the unpaid subscription money. This benefit isn't available just in case of a sole proprietorship.
Legal Status and Social Recognition: One Person Company may follow the Private Limited Company structurally; this is often the foremost popular business structure within the world. Gives suppliers and customers a way of business confidence likewise big organizations like it better to affect private limited companies rather than proprietorship firms.
A Private Limited business structure enjoys a recognition of corporate status in society which helps the entrepreneur to draw in the quality workforce and helps to retain them by giving corporate designations, like directorship. These designations can't be employed by proprietorship firms.
Adequate Safeguards: In case of sudden death/disability of the only person should be provided through the appointment of another individual as a nominee director. On the demise of the first director, the nominee director will manage the affairs of the corporate till the date of transmission of shares to legal heirs of the demised member.
Easy to raise Loan from Banks: Banking and financial institutions like better to lend money to the corporate instead of proprietary firms. In most situations, Banks insist the entrepreneurs convert their firm into a personal Ltd. before sanctioning funds. So it's better to register your startup as a 1 Person private limited instead of a proprietary firm.
Easy to Manage: No requirement to carry annual or Extra-Ordinary General Meetings. Only the resolution shall be communicated by the member of the corporate and entered within the minutes book and signed and dated by the member and such date shall be deemed to be the date of the meeting.
Filling with ROC: Very few ROC filing is to be filed with the Registrar of Companies (ROC). Mandatory rotation of auditor after the expiry of the maximum term isn't applicable.
The provisions of Section 98 and Sections 100 to 111 (both inclusive), concerning the holding of general meetings, shall not apply to a 1 Person Company.
Perpetual Succession: An OPC being an incorporated entity also will have the feature of perpetual succession and can make it easier for entrepreneurs to boost capital for business. The OPC is a man-made entity distinct from its owner. Creditors should therefore be warned that their claims against the business can't be pressed against the owner.
Tax Flexibility and Savings: In an OPC, a corporation can form a legitimate contract with its shareholder or directors. This suggests as a director you'll receive remuneration, as a lessor you'll receive rent, as a creditor you'll lend money to your own company and earn interest. Directors’ remuneration, rent and interest are deductible expenses that reduce the profitability of the corporate and ultimately brings down the taxable income of your business.
Online Legal India™ expert team of highly qualified CA/CS and 10+ years of experienced lawyers who would assist you to Register your One Person Company(OPC). The owner of the One Person Company should have proper knowledge about GST and all the related affairs associated with it. The owner of the particular OPC may take help from Online Legal India experts if he/she does not know properly about the GST annual return due date for FY 2020- 21. We have exclusive services for those who are willing to venture into a company, business, or any other kind of organization. If you want to run any export business then you need to register for obtaining the import-export code. Every business initially needs to do trademark registration because it is mandatory for your business.