Benefits of One Person Company in India

A one-person company is a forward-thinking concept that promotes the incorporation of micro, small, and medium-sized businesses and persons with entrepreneurial dreams but do not want to involve resources or means to get more partners to execute their business plan. It gives all the benefits of a company like credit, bank loans, limited liability, access to the market and legal protection to individual entrepreneurs.

One-person companies are a popular option among entrepreneurs as they provide a variety of advantages. Some of the benefits include a lesser compliance burden, low investment, and more.

In India, there are many people who work in the unorganized sector and lack the capital to get a proprietary firm registered. To cater to this need, the government introduced a new company type called one-person companies (OPC) in the Union Budget 2021-22.

The OPC has a lower paid-up capital and turnover requirement and is permitted to hold more board meetings or annual general meetings than other company types. In addition, the government has also reduced compliance rules for OPCs.

Moreover, the government has eased the criteria for non-resident Indians to incorporate a one-person company. This includes reducing the time period for a non-resident Indian to stay in India and incorporate a company from 182 days to 120 days.

Besides the above-mentioned benefits, one-person companies have a few other drawbacks as well. Unlike proprietary firms, one-person companies are more likely to lose their investment as investors may be wary of lending money to a new company.

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