Benefits of a One Person Company
A One Person Company (OPC) provides protection for limited liability, with the personal assets of the owner not being at risk. It also gives a separate legal identity, which adds credibility and continuity to the business. Below are the merits of one person company
Business Operation Benefits
- Full Control: As a sole owner and director, the person has full control over the operation of the company and the decisions.
- Ease of Administration: Since there are less regulatory requirements, OPCs are easier to administer than other forms of company structures.
- Flexibility: OPCs are easily convertible to other forms of companies as the business expands, offering flexibility for future growth.
Legal and Compliance Benefits
- Limited Liability Safeguard: The assets of the owner are safeguarded since their liability is restricted to the amount of investment in the company.
- Separate Legal Entity: OPCs possess a separate legal personality and a straightforward business structure which allows them to make contracts, own assets, and sue or be sued in their own name.
- Less Compliance Requirements: OPCs are free from the different compliance requirements that are mandatory for other forms of companies like conducting annual general meetings, having minimum capital requirements and are best suited for small business.
Funding and Succession Planning
- Higher Credibility: Since an OPC is a registered company, it usually finds it easier to get bank and financial institution funding.
- Succession Arrangements: The nominee director facilitates succession if the owner dies or becomes incapacitated, leaving a clear plan of succession.