{"id":731,"date":"2018-06-29T12:48:31","date_gmt":"2018-06-29T12:48:31","guid":{"rendered":"https:\/\/companyregistrationonline.in\/?p=731"},"modified":"2022-04-27T08:54:36","modified_gmt":"2022-04-27T08:54:36","slug":"disadvantages-one-person-company","status":"publish","type":"post","link":"https:\/\/companyregistrationonline.in\/blog\/disadvantages-one-person-company\/","title":{"rendered":"Disadvantages of One Person Company"},"content":{"rendered":"
Companies Act, 2013 introduced the concept of One Person Company in India to promote self-employment and to motivate individuals who are capable of starting a business of their own. The need for two directors in a private limited company is eliminated which aids the entrepreneurs to have total control over their entity, and also enjoying limited liability. <\/p>\n
Number of Member is the first in the Disadvantages of one-person company, the One Person Company Registration<\/a><\/strong> can have a Minimum or Maximum no. of 1 Member. It only allows one person to own and run the entire business. A minor is neither eligible to become a member or a nominee of the OPC nor it cannot hold a share with beneficial interest.<\/p>\n Suitability for small business <\/u><\/strong><\/p>\n The suitability for small businesses plays important role in the disadvantages of a person company as the OPC is suitable only for small businesses. OPC can thus have a maximum paid-up share capital of Rs. 50 Lakh or an annual turnover of Rs. 2 Crores. Otherwise, an OPC needs to be converted into a Private Limited Company<\/strong><\/a>.<\/p>\n An OPC<\/a><\/strong> is not allowed to carry out Non \u2013 Banking Financial Investment activities including the investment in securities of any corporate. OPC is not permitted to convert itself into a Section 8 company.<\/p>\nBusiness Activities<\/u><\/strong><\/h2>\n