Advantages of One Person Company (OPC) under Companies Act, 2013:

Apart from advantages available to Private Limited Company, additional privileges of forming a One-person Company (OPC) are listed below:

Single person to run the company:

The one person company allows a single person to run a company limited by shares, whereas sole proprietorship is an entity which is run and owned by one individual and there is no distinction between the owner and the business.

Limited Liability:

The basic difference between a sole proprietorship and one person company is the way and manner in which the liability is treated . One person company is different from sole proprietorship because it is a separate entity from the person constituting it , whereas in sole proprietorship, the proprietorship and the owner are not separate entities and they are the one and same.

Liability limited to unpaid subscription money:

The Liability of the shareholder is limited to the unpaid subscription money in his name. On the other hand, the liability in a sole proprietorship, ie., the person/owner alone is absolutely liable.

Compliances in the Companies Act, 2013:

A One Person Company has to file annual returns just like a normal company. It also needs to get its accounts audited in the same manner. On the other hand, a sole proprietorship needs to get audited if its turnover crosses certain limits. And further, OPC exempted from the following listed compliances which are not available to private limited companies

1. Not required to hold Annual General Meeting.

2. Non-applicability of provision relating to

   1. Power of Tribunal to call meetings of members.

   2. Calling o extraordinary general meeting (EGM)

   3. Notice of meeting [sec 101]

   4. Statement to be annexed to notice [sec 102]

   5. The quorum for meeting [sec 103]

   6. Chairman of meeting [sec104]

   7. Proxies [sec 105]

   8. Restriction of voting rights [sec 106]

   9. Voting by show of hands [sec107]

   10. Voting through electronic means [sec 108]

   11. Demand for poll [sec 109]

   12. Postal ballot [sec 110]

   13. Circulation of members resolution [sec 111]

   14. 
       

3. Not required to pass any ordinary/special resolution but it was sufficient if the resolution is entered in the minute's book.

4. Not required to call Board Meeting if there is only one director. The date of entering the resolution in the minutes book shall be the date of the Board Meeting.

For a list of documents required for OPC incorporation Click Here