One Person Company (OPC) as the name suggests is a single person ownership but an advancement to Proprietorship. It being a separate legal entity similar to Limited companies it limits the liability of the sole owner to his/her contribution. Though it is owned by a single person it must have a nominated director. Further, it has to be converted into a Limited Company if its annual turnover crosses Rs 2.00 crores.
Benefits of a One Person Company
The liability of the OPC is limited to the extent of the value of the share the individual holds, however he/she could take more risk in business without affecting personal assets.
OPC being separate legal entity, the same will continue into exist even in case of death of the single person, as it will be passed on to the nominee director.
OPC can raise its funds through venture capital, financial institutions, angel investors, etc. by graduating itself to a private limited company.
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