Benefits Of Formation Of One Person Company
(A) Individual Entrepreneurship
OPC gives the individual entrepreneurs all the benefits of a company, which means they will get credit, bank loans, access to market, limited liability, and legal protection available to companies.
(B) Opportunities For Small Businessmen
OPC would provide tremendous opportunities for small businessmen and traders, including those working in areas like handloom, handicrafts and pottery.
(C) Separate Legal Existence
A company is a Separate legal entity from its Owners and Management in the eyes of law.It can have a PAN number, bank accounts, licenses, approvals, contracts, assets and liabilities in its unique name.
(D) Management and Ownership Separation
Management & shareholders can be separated. A shareholder can invest the fund in fruitful business without managing & Management can operate their business without frequent interruption of investors.
(E) Lower Compliance Requirements
The compliance requirements are lesser in comparison to the private company.Compliances like holding General and Board Meeting, etc. are not applicable to OPC. However, Board Meeting must be held if more than one director is on Board.
(F) Limited Liability
Shareholder enjoys limited liability to the extent of capital invested. In case of any unforeseen liabilities, it would be limited to the company and not impact the shareholders. Shareholder's personal assets protected in the event of the company's insolvency.
(G) Capacity to Sue and to be Sued
OPC can take legal action against another and also other person can take legal action against company separate from directors, shareholders & promoters.