Benefits of One Person Company in India

Benefits of One Person Company in India

 


A major part of the business world in India is dominated by small companies that are run by sole proprietors. While this is a good way to start a business, it can also be complicated as there are many rules and regulations that need to be followed in order to ensure that you are doing the right thing.

In order to overcome the complexity faced by sole proprietors, the concept of One Person Company was introduced through the Companies Act, 2013. This new business model was created to encourage more entrepreneurs to come forward and start a business in the country.

The main advantage of a One Person Company is that it is a separate legal entity, which is capable of doing all the things that an entrepreneur would do. It can also earn a profit through the sales of its products and services.

It can also be a legal entity with limited liability for the owners. It can also be a registered organization that can conduct meetings, file Annual audited accounts and make payments to creditors.

These advantages are often what motivates people to start a business in the first place. It is a way to be independent of the large corporations that they have worked for and it can also give them a sense of security and pride.

This type of business structure is very popular in the market and gives suppliers and customers a feeling of confidence. Similarly, it is also preferred by big organizations because it gives them a better social recognition and legal status.

The only person required to be the owner of a One Person Company is a 'natural person' who is an Indian citizen, and who has been residing in the country for at least a period of one hundred and eighty days before filing a return of incorporation. Once you have met this requirement, you can apply to incorporate a One Person Company in India.

It is also possible for a single member to be the only nominee, as per Section 3(3) (c) of the Companies Act. A nominee is required to be mentioned while registering the company, and they are eligible to take over in case of the death or disability of the owner.

Deductions can be given to the OPC from the income tax department as per the provisions of the Income Tax Act. This can include directors' remuneration, rent, and interest.

This can be done by incorporating the company as a PrivateLimited Company or even a Limited Liability Partnership (LLP) which is an elevated version of the Proprietorship.

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