How Can You Set Up A One Person Company?

An OPC is excused from little routine paperwork, such as conducting annual general meetings, general meetings and extraordinary general meetings.

Benefits & Drawbacks

One of the greatest advantages of the One Person Company is that the company’s identity will be distinct from that of its owner. Therefore, in case the firm gets involved in a legal argument, the owner will not be sued, only the company will.

Limited liability can be counted as another advantage. As the company is separate from that of its owner, the personal properties and assets of the directors and shareholders remain protected in case of any ambiguity. While a proprietorship offers no such advantage.

Is Sole Proprietorship Preferable?

Though the OPC concept offers many advantages, it may not be a viable option for everyone. In comparison to a company, a proprietorship is easy to set up. The paper work is limited to few business-specific approvals. On the other hand the risk is higher in proprietorship as the owner himself will be responsible for the business

As per taxation rules and regulations, the income generated from the business will be counted together with personal income. Therefore the tax amount will be calculated on the slabs in which it falls. "In some cases, a proprietorship can be a tax-inefficient way of doing business. Hence, you must carefully analyse all aspects before choosing the business structure," says Vaibhav Sankla, director, H&R Block.

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