One Person Company
As the name suggests, such a company only has one person as its member. In other words, a One Person Company has only one shareholder as its member. Such companies are set up by entrepreneurs in the early stages of their business in order to avail the various perks OPCs offer as opposed to the sole proprietorship model of a business organisation. OPC has an edge over sole proprietorship in the sense that while an OPC is a separate legal entity from that of its member, implying that its assets and liabilities are separate/distinct from the latter; a sole proprietorship is not separate from that of its proprietor. This means that the proprietor is personally liable for the business debts, which is not the case in an OPC. Other characteristics of OPC are:
- Companies Act, 2013 defines an OPC as a private company with a single member.
- The sole member of the company has to announce a nominee at the time of registration of such OPC.
- OPC lacks the feature of perpetual succession as opposed to a joint stock company as the death, insanity, or insolvency of the sole member would leave the decision up to their nominee whether they want to continue the business or not.
- There is no amount of minimum paid-up capital prescribed for an OPC.
- An OPC must have one person as its director. The maximum number of directors can be 15 at one point of time.
Company and its Types
A company is one of the most important and prominent forms of business organization. It can be described as a voluntary association of individuals, having a common purpose, who agree to pool their funds and unite to achieve the said goals. It can be called an artificial person created under the jurisdiction of law having a distinct legal personality and its signature, referred to as the common seal. It is essentially an artificial person in that it exists independently of the people who own, direct, and support its business. In legal terms, it is called an artificial person.
According to The Company’s Act, 2013, a “company” means a company incorporated under this act or under any previous company law [Section 2 (20)].
According to L.H. Haney, “Company is an artificial person created by law having separated entity with a perpetual succession and common seal”.
Table of Content
- Characteristics of a Company
- Types of Companies
- 1. Public Company
- 2. Private Company
- 3. One Person Company