The concept of One Person Company in India was introduced through the Companies Act, 2013 to support entrepreneurs who on their own are capable of starting a venture by allowing them to create a single person economic entity. With notification of Chapter II of the Companies Act, 2013 with effect from 01.04.2014, it is now permitted to incorporate a One Person Company under the provisions of the Companies Act, 2013 and some important features are:-

  • Ownership of a business can be easily transferred in a company by transferring shares. The signing, filing and transfer of share transfer form and share certificates is sufficient to transfer ownership of a company.
  • A company being a separate legal person, is unaffected by the death or other departure of any member and continues to be in existence irrespective of the changes in ownership.
  • OPC can be registered only as a private company which means that all the provisions applicable to private company will be applicable to an OPC, unless otherwise expressly excluded in the Act or rules made there under.

Benefits And Previliges Available To OPC

  • Retirement by rotation is not applicable.
  • Total managerial remuneration payable by a one person company, to its directors, including managing director and whole-time director, and its manager in respect of any financial year may exceed eleven percent of the net profits.
  • Need not to hold annual general meeting.

Limitations Of OPC

OPC cannot be incorporated or converted into Section 8 Company (i.e. company with charitable objects, etc.) or carry out non-banking financial activities, including investment in securities of any body corporate.

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