One Person Company (OPC) is a moderately new idea in the business world that gives the advantages of both a sole ownership and a private limited company. It permits a solitary person to work as a different legitimate substance, giving restricted risk while keeping up with full control. One inquiry that frequently emerges is: what number of OPCs might a person at any point make? In this blog, we’ll dig into the guidelines and contemplations encompassing this point.
Understanding the Basics for OPC
Prior to examining the quantity of OPCs an individual can make, we should momentarily comprehend what an OPC is. An OPC is a sort of business structure where a solitary individual stands firm on the footing of both the investor and chief. This implies that the individual has full command over the organisation’s activities and dynamic cycles. The idea was acquainted with urge business visionaries who need to begin a business all alone while partaking in the advantages of restricted risk.
The Companies Act, 2013 introduced the novel thought of One person company (OPC). As the name proposes, an OPC is an association spread out by a singular person. A single individual spreads out and manages the association. An OPC has all of the features of an association, such as relentless movement, limited commitment and an alternate genuine component.
Is Individual allowed to create more than one OPC?
Before the execution of the Companies Act, 2013, a lone individual couldn’t spread out an association. To spread out his business, he/she could choose only for sole possession as there should be somewhere around two chiefs and two people to spread out an association.
In a Private company, at least 2 directors and 2 Individuals are required, though in a Public Organization, at least 3 directors and at least 7 individuals. A solitary individual couldn’t integrate an Organization beforehand.
As per section 2(62) of the Companies act 2013, an association can be outlined with just 1 director and 1 individual. The director and individual can be a comparable person. It is a kind of an association where the consistency necessities are lesser than that of a privately owned business. Thus, one individual association suggests one individual who may be an occupant or NRI can incorporate his/her business that has the features of an association and the upsides of a sole possession.
The Creation of Multiple OPCs
While the idea of OPC is intended to advance simplicity of carrying on with work for individual business visionaries, there are sure impediments on the quantity of OPCs that can be made by a solitary person. These limits shift from one country to another and are administered by the regulations and guidelines set up. The quantity of OPCs an individual can make fluctuates starting with one ward then onto the next, mirroring the assorted methodologies taken by various nations to advance business development, forestall abuse, and guarantee consistency. Here are a few models:
- India:
Under the Indian Companies Act of 2013, an individual is allowed to lay out just a single OPC at a time. This limitation is established in the official aim to advance certified business and control possible abuse for illegal exercises.
- United States:
In the US, the construction practically equivalent to an OPC is in many cases the sole ownership or a solitary part Limited Liability Company( LLC). While there is no express cutoff on the quantity of LLCs one can lay out, individual state guidelines and tax collection contemplations become an integral factor.
- European Union:
Different nations inside the European Union might have varying guidelines concerning the quantity of OPCs an individual can lay out. Some could have limitations much the same as those in India, while others might have more merciful approaches.
- Other Jurisdictions:
Each country’s legal framework chooses the degree of OPC creation. A couple of countries could have no restrictions on the amount of OPCs, focusing in rather on genuine business lead and managerial consistency.
Rationale Behind the Limitations of having more OPCs
The limitations on the quantity of OPCs an individual can make fill a few needs:
- Preventing Abuse:
By restricting the quantity of OPCs an individual can lay out, specialists expect to forestall the abuse of this business structure for fake or unlawful purposes.
- Promoting Genuine Entrepreneurship:
The essential goal of OPCs is to work with independent company adventures and support real business ventures. Forcing limitations guarantees that OPCs are utilised by people who are truly dedicated to building and working a real business.
- Administrative Oversight:
Dealing with various organisations at the same time can be mind boggling and may redirect a singular’s consideration from the centre business exercises. Restricting the quantity of OPCs keeps up with compelling oversight and the executives.
Legal Aspects and Restrictions of creating multiple OPCs
While the idea of OPC offers adaptability, there are sure lawful viewpoints and limitations that people should know about:
- Number of OPCs:
An individual can frame just a single OPC. This limitation is pointed toward forestalling abuse of the idea for tax avoidance or other dishonest practices. It guarantees that the OPC stays a truly one-individual undertaking and doesn’t develop into a complicated design.
- Nominee Director:
Each OPC should name an individual as a chosen one chief in case of the first chief’s debilitation or passing. The candidate chief assumes control over the organisation’s undertakings in the event that such a circumstance emerges.
- Conversion:
In the event that an OPC passes a specific boundary of turnover or settled up capital, it should be changed over into a confidential restricted organisation inside a predefined period.
- Limited Liability:
The critical benefit of an OPC is restricted risk. This implies that the individual resources of the individual are isolated from the organisation’s liabilities. It’s essential to maintain the legitimate detachment among individual and business issues to keep up with this advantage.
Considerations for Entrepreneurs
For business people considering the OPC structure, here are a few contemplations to remember:
- Nature of Business:
Pick the OPC structure provided that it lines up with your business objectives. It’s great for private companies or solo endeavours yet may not be appropriate for bigger ventures with numerous partners.
- Legal Compliance:
Guarantee that you stick to every legitimate prerequisite and keep up with appropriate documentation to stay away from any lawful entanglements later on.
- Growth Potential:
If you anticipate significant growth in your business, consider how the OPC structure might impact your ability to raise funds or bring in additional partners.
Conclusion
All in all, an individual can make just a single OPC starting around my last information update. This limitation is set up to keep up with the embodiment of a genuine one-individual venture while forestalling abuse. Business people keen on beginning an OPC ought to think about the legitimate viewpoints, limitations, and their business targets prior to continuing. The OPC structure offers the upside of restricted responsibility and control, making it a reasonable choice for solo business people who wish to lay out a formal legitimate substance for their endeavors. Continuously stay refreshed with the most recent legitimate and administrative changes in your purview while considering any business structure.
