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.
One of the biggest advantages of a One Person Company (OPC) is that there can be only one member in an OPC, while a minimum of two members are required for incorporating and maintaining a Private Limited Company or a Limited Liability Partnership (LLP). Similar to a Company, a One Person Company is a separate legal entity from its promoter, offering limited liability protection to its sole shareholder, while having continuity of business.
An OPC requires one nominee, who becomes the member of the company in case of death or any other incapacity of the original member.
- Only a natural person (Not Association of persons, Body of Individuals, Company, or any other entity) who is a resident of India in preceding calendar year (stayed in India for 182 days) can form OPC.
- You cannot incorporate more than one OPC or be the nominee of more than one OPC.
- In case the average three year turnover of the OPC exceeds Rs. 2 crores or the paid-up capital exceeds Rs.50 lakh, it must compulsorily convert to a Private Limited Company.
- Rules of OPC do not permit Non-Banking Financial Institutions.
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