Benefits of One Person Company in India
The concept of one Person Company was introduced to cater the requirements of the aspiring entrepreneurs who are looking for an option which would allow them to incorporate their business in a legal manner. As per the Companies Act, 2013, a single individual could register a company under the name of OPC - One Person Company as it is a combination of the benefits of a sole proprietorship and a limited liability company.
A single owner is highly favourable in making a quick decision, managing the business without any interference from other people and it also eliminates the need for taking suggestions from other people. It also gives a sense of belonging that motivates the owner to grow their business further.
Having only a single owner is also beneficial in getting the best rates for a loan because banks do not have to check the credit score of the company and it can be applied easily. It is also very easy to register a one person company online in India.
Limited Liability is an added advantage as it limits the liability of the Entrepreneurship. The independent corporate existence of a one person company is another major advantage as it keeps the identity and history of the business intact.
Low investment is another important advantage of a one person company as the minimum amount to incorporate this type of company is only rupees 5000. In addition to this, the cost of registration is less as compared to a traditional business structure.
The Union Budget 2021-22 has introduced many incentives for incorporating a One Person Company. The government has raised the paid up capital threshold to two crores and also increased the turnover threshold to twenty crores. This was done in order to promote ease of doing business and it is a positive move for small businesses to get incorporated under this act.
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