One Person Company in India: A Critical Analysis
Padma Singh*
Assistant
Professor, National Law Institute University, Bhopal, Madhya Pradesh, India
Abstract:
The concept of a One
Person Company (OPC) represents one of the most transformative reforms in
post-independence Indian corporate law. Introduced under Section 2(62) of the
Companies Act, 2013, and operationalized through the Companies (Incorporation)
Rules, 2014, the OPC enables a single natural person to incorporate, own, and
manage a private limited company with full limited liability protection. This
paper critically examines the historical origins, statutory framework,
comparative global dimensions, jurisprudential underpinnings, advantages, and
limitations of the OPC model in India. Particular attention is given to
landmark case law including Salomon v A
Salomon & Co Ltd AC 22, Lee v Lee’s
Air Farming Ltd AC 12, and Macaura v
Northern Assurance Co Ltd AC 619 that together form the doctrinal
foundation upon which the OPC concept rests. The paper concludes that while the
OPC is a commendable legislative innovation, several structural deficiencies
including tax neutrality, compliance burden, conversion rigidity, and misuse
potential render it an incomplete solution for India’s vast community of small
and micro entrepreneurs.
Keywords: One Person Company (OPC), Companies Act, 2013,
Separate Legal Personality, Corporate Veil, Limited Liability, Sole Proprietorship,
JJ Irani Committee, Entrepreneurship
The history of corporate
law in India has long revolved around the presumption that a “company”
necessarily presupposes an association of persons,
a plurality of shareholders united by common commercial purpose. The Companies
Act, 1956 codified this assumption by mandating a minimum of two shareholders
and two directors for the incorporation of a private limited company. This
legislative floor proved to be a substantial barrier for individual
entrepreneurs who desired the institutional protections of the corporate form -namely,
limited liability, separate legal personality, and perpetual succession, but
could not or did not wish to admit a second partner merely to satisfy a
statutory minimum.
The introduction of the
One Person Company (OPC) through the Companies Act, 2013 marks a decisive
rupture from this tradition. For the first time in Indian corporate history, a
solitary natural person may constitute a company in his or her own name, functioning
simultaneously as its sole member, sole director, and sole decision-maker. The
legal pedigree of this concept is, however, far older than the 2013 Act; its
intellectual ancestry stretches back to the celebrated English case of Salomon v A Salomon & Co Ltd decided
by the House of Lords in 1897, in which the court upheld the distinct legal
personality of what was, in commercial substance, a one-man enterprise.
This paper proceeds as
follows: Part II traces the historical and comparative origins of the OPC
concept. Part III analyses the statutory framework under the Companies Act,
2013 and the Companies (Incorporation) Rules, 2014. Part IV undertakes a
detailed examination of landmark case law that provides the jurisprudential
foundation of the OPC. Part V critically evaluates the advantages and
disadvantages of the OPC model. Part VI offers conclusions and recommendations.
HISTORICAL AND
COMPARATIVE ORIGINS
The Irani Committee and
the Indian Legislative Genesis
The formal recommendation
for recognising a one-person economic entity in India was first articulated by
the Expert Committee on Company Law, constituted by the Government of India on
2 December 2004 under the chairmanship of Dr Jamshed J Irani. The Committee,
which submitted its Report on 31 May 2005, observed in Clause 6 of Chapter III:
‘With increasing use of
information technology and computers, emergence of the service sector, it is
time that the entrepreneurial capabilities of the people are given an outlet
for participation in economic activity. Such economic activity may take place
through the creation of an economic person in the form of a company. Yet it
would not be reasonable to expect that every entrepreneur who is capable of
developing his ideas and participating in the market place should do it through
an association of persons. To facilitate this, the Committee recommends that
the law should recognise the formation of a single person economic entity in
the form of “One Person Company”.’
The Committee further
recommended that OPCs be provided with a simpler regulatory regime through
exemptions, ‘so that the single entrepreneur is not compelled to fritter away
his time, energy and resources on procedural matters’. These recommendations
were accepted in principle and incorporated into the Companies Bill, 2009,
which was introduced in the Lok Sabha on 3 August 2009. The Bill eventually
became the Companies Act, 2013, which received Presidential assent on 29 August
2013, and the OPC provisions were operationalised through the Companies
(Incorporation) Rules, 2014, brought into force on 1 April 2014.
Within the first five
months of the OPC’s operationalisation (April to August 2014), 478 companies
had been registered as OPCs, collectively commanding an authorised capital of
INR 11.95 crore. The first ever OPC incorporated in India was Vijay Corporate Solutions OPC Private
Limited, registered at Delhi on 28 April 2014, with Mr Vijay Kumar Sharma
as its sole director and shareholder.
The OPC is by no means an
Indian innovation in isolation. Several major economies had already enshrined
single-person company forms in their corporate statutes prior to India’s
adoption of the model.
·
United Kingdom: The conceptual
foundation was laid by the House of Lords in Salomon v A Salomon & Co Ltd
AC 22, which recognised the distinct corporate identity of what was
essentially a one-man business. The UK’s Companies Act 2006 subsequently
provides explicitly for single-member private companies.
·
Singapore: The Companies
(Amendment) Act 2004 introduced the single-member company.
·
China: The Company Law of
China (amended in 2005) recognises the limited liability company with a sole
shareholder.
·
Pakistan: Pakistan Companies
Ordinance 1984, as amended in 2003, contains similar provisions.
·
Turkey: Article 338 of the
Turkish Commercial Code (new TCC 2012) permits a joint stock company and a
limited liability company to be formed by a single shareholder.
In the United States, the
closely related concept of the Single-Member LLC (Limited Liability Company)
has long been recognised, providing limited liability to a sole entrepreneur
without the strict requirements of a traditional corporation. The comparative
experience universally demonstrates that the motivation for recognising
single-person entities is consistent across jurisdictions: to encourage
entrepreneurship, reduce the barriers to formalisation of micro and small
businesses, and channel individual economic activity through accountable,
regulated corporate structures.
Definition and
Foundational Provision
Section 2(62) of the
Companies Act, 2013, which came into force on 1 April 2014 pursuant to
Enforcement Notification S.O. 902(E) dated 26 March 2014, defines an OPC as:
“One Person Company”
means a company which has only one person as a member.
Section 3(1)(c) of the
Act provides that a company may be formed for any lawful purpose by one person,
constituting an OPC as defined in clause (62) of Section 2. Critically, the
proviso to Section 3 requires that the subscriber to the Memorandum of
Association of an OPC must nominate another person as the nominee member, who
shall, in the event of the subscriber’s death or incapacity to contract, become
the member of the OPC. This nominee requirement distinguishes OPC from a pure
sole proprietorship and is crucial for the perpetual succession that defines
the corporate form.
Eligibility Criteria
under the Incorporation Rules, 2014
Rule 3 of the Companies (Incorporation)
Rules, 2014, prescribes the following eligibility criteria:
1. Only a natural person who is an Indian citizen
and resident in India is eligible to
incorporate an OPC or to act as its nominee. The term ‘resident in India’ means
a person who has stayed in India for a period of not less than 182 days during the immediately
preceding one calendar year.
2. A natural person can be a
member of only one OPC at any given time,
and can likewise be a nominee of only one OPC at a time.
3. No minor can be a member
or nominee of an OPC, nor can a minor hold shares with beneficial interest.
4. Non-Resident Indians
(NRIs) and foreign citizens are ineligible
to incorporate an OPC, a restriction that drew academic criticism for
discouraging Indian diaspora investment.
5. An OPC cannot be incorporated or converted
into a company under Section 8 (not-for-profit company) of the Companies Act,
2013.
6. An OPC cannot carry out Non-Banking Financial
Investment activities, including investment in securities of any body
corporate.
Management and Corporate
Governance
Under Section 122 of the
Companies Act, 2013, an OPC is exempted from the requirement of holding Annual
General Meetings (AGMs). If an OPC has only one director, it is exempted from
holding board meetings, it suffices for resolutions to be passed and entered
into the minutes book. Where more than one director is present, at least one
board meeting must be held in each half of the calendar year, with a minimum
gap of ninety days between consecutive meetings.
The financial statements
of an OPC are required to be signed by only one director. Pursuant to Section
137(1) of the Act, these statements must be filed within 180 days from 31 March
of every year with the Registrar of Companies, as opposed to 60 days for other
classes of companies which is a notable relaxation reflecting the reduced
compliance burden intended for OPCs. The Cash Flow Statement is also not a
mandatory component of an OPC’s financial statements.
Under Rule 6 of the
Companies (Incorporation) Rules, 2014, an OPC was mandatorily required to
convert itself into a private limited company or a public company within a
period of six months in either of the following situations:
1. When the paid-up share capital exceeded Rs 50
lakh (Rs 5 million); or
2. When the average annual turnover exceeded Rs 2
crore (Rs 20 million) during the immediately preceding three consecutive
financial years.
Voluntary conversion was
permissible, but not before the expiry of two
years from the date of incorporation of the OPC. This two-year lock-in was
widely criticised as an impediment to organic growth, compelling a successful
OPC to incur the compliance and structural costs of conversion at precisely the
stage when its resources were most needed for business expansion.
LANDMARK CASE LAW: THE
JURISPRUDENTIAL FOUNDATIONS OF THE OPC
The OPC concept does not
exist in a doctrinal vacuum. It draws its legal legitimacy from a body of
landmark common law and Indian judicial precedent that collectively establishes
the doctrines of separate corporate personality, limited liability, and the
conditions for ‘lifting the corporate veil’. An examination of these cases is
essential to understanding both the theoretical justifications and the inherent
tensions within the OPC framework.
Salomon v A Salomon & Co Ltd AC 22 (House of Lords)
This is unquestionably
the most foundational case in the jurisprudence of corporate law and the most
direct judicial precursor of the OPC concept. Aron Salomon was a prosperous
boot and leather merchant who, in 1892, incorporated his sole proprietorship
into a limited liability company - A
Salomon & Co Ltd, under the Companies Act 1862. The company was
structured to satisfy the then-statutory minimum of seven members, with Salomon
himself holding 20,001 shares and his wife and five children holding one share
each. In commercial substance, Salomon was the company.
When the company went
into insolvency, the liquidator sought to hold Salomon personally liable for
the company’s debts, arguing that the nominal shareholders were mere dummies
and the company was, in substance, Salomon himself. The Court of Appeal agreed
with this view, holding the arrangement to be ‘contrary to the true intent and
meaning of the Companies Act’.
The House of Lords
unanimously reversed. Lord Macnaghten stated with celebrated clarity:
“The company is at law a
different person altogether from the subscribers to the memorandum; and, though
it may be that after incorporation the business is precisely the same as it was
before, and the same persons are managers, and the same hands receive the
profits, the company is not in law the agent of the subscribers or trustee for
them. Nor are the subscribers as members liable, in any shape or form, except
to the extent and in the manner provided by the Act.”
The significance of Salomon for the OPC cannot be
overstated. The case established that the law recognises the separate
personality of a company even when one person effectively controls all its
shares and runs it as a personal enterprise. The OPC provisions of the
Companies Act, 2013 are, in a very real sense, the statutory codification and
modernisation of the Solomonic principle, the formal recognition that a single
person may legitimately wear two hats simultaneously: as both the beneficial owner
and the directing intelligence of a distinct legal entity.
Macaura v Northern Assurance Co Ltd AC 619 (House of Lords)
This case further
illustrates the strict separation between a sole shareholder and the company he
controls. Mr. Macaura sold timber from his estate to Irish Canadian Sawmills
Ltd, a company of which he was effectively the sole beneficial owner. He
insured the timber against fire in his own name, rather than in the company’s
name. When fire destroyed the timber, the insurer refused to pay, and the House
of Lords upheld the refusal.
Lord Wrenbury articulated
the controlling principle: “The
corporator even if he holds all the shares is not the corporation ... neither
he nor any creditor of the company has any property legal or equitable in the
assets of the corporation.”
The relevance of Macaura to OPC analysis is twofold.
First, it reinforces that the assets of an OPC belong to the company, not to
the sole member, a consequence that can produce unexpected results for
entrepreneurs who conflate their personal and corporate estates. Second, it
demonstrates the limitations of the corporate form: an OPC’s sole member must
meticulously ensure that contracts, insurance, and other legal instruments are
executed in the company’s name, not in the member’s personal capacity. The
practical likelihood of such conflation, given that the OPC is, by design,
controlled entirely by one individual presents a structural governance risk
that the legislation did not adequately address.
Lee v Lee’s Air Farming Ltd AC 12 (Privy Council)
This New Zealand Privy
Council case extended and reinforced the Salomon
principle into the domain of employment law and remains one of the most vivid
judicial illustrations of the real-world implications of the separate legal
entity doctrine for a one-person controlled company. Mr Lee incorporated Lee’s
Air Farming Ltd to carry out aerial top-dressing of farmland. He held 2,999 of
the company’s 3,000 shares, was its sole governing director, and was
simultaneously employed as the company’s chief pilot.
Mr Lee died in a flying
accident, and his widow claimed workers’ compensation under the New Zealand
Workmen’s Compensation Act, 1923, on the basis that her husband had been
employed by the company. The New Zealand Court of Appeal dismissed the claim on
the ground that Lee could not be both the employer and the employee, the two
offices were, in its view, legally incompatible.
The Privy Council
reversed this decision, holding that the company was a separate legal entity
and was perfectly capable of entering into an employment contract with its own
governing director. The fact that Lee controlled the company did not collapse
the distinction between him and it. Lord Morris stated that ‘the separateness of the two personalities
was the very raison d’ętre of the private company’.
For OPC jurisprudence, Lee is particularly instructive. It
validates the possibility and also the
legality of an OPC’s sole member being simultaneously the company’s employee,
thereby accessing employee benefits and social security protections. It also
underscores that the veil of incorporation remains intact even in a
single-person company, absent fraud or abuse. This case is routinely cited by
Indian scholars and practitioners as providing the essential common law
authority for the employability and contractual capacity of OPC owners
vis-ŕ-vis their own companies.
Tata Engineering and Locomotive Co Ltd v State of
Bihar AIR 1965 SC 40
This Supreme Court of
India judgment is significant for confirming the separate legal personality of
a company within the Indian constitutional and statutory framework. The court
held that the entity of a company is entirely distinct from its members; the company
has its own name and seal, its assets are separate from those of its members,
and the liability of shareholders is limited to the amount of capital invested
by them.
The judgment is relevant
to OPC analysis because it establishes, within the Indian constitutional
framework, that a company even one dominated and controlled by a single person
retains a legal identity entirely separate from that of its human controller.
Any attempt by an OPC’s sole member to invoke constitutional protections (such
as Fundamental Rights) on behalf of the company, or to conflate corporate and
personal assets, must be assessed in light of this principle.
The Doctrine of Lifting
the Corporate Veil and Its Implications for OPCs
The principle of separate
legal personality is not absolute. Courts both in England and in India have
developed the doctrine of ‘lifting’ or ‘piercing’ the corporate veil,
disregarding corporate personality in limited circumstances to hold the real
person behind the corporate facade accountable.
The statutory bases for
lifting the veil in India, as available under the Companies Act, 2013, include:
·
Section 7(7): Where incorporation is
obtained through fraudulent means, the company may be wound up and persons who
were guilty may be held personally liable.
·
Section 251: Liability for fraudulent
trading where a person who is knowingly party to carrying on a business with
intent to defraud creditors may be held personally liable.
The judicial bases, as
articulated in LIC v Escorts Ltd AIR
1986 SC 1370 which is one of the most comprehensive Indian Supreme Court
pronouncements on the doctrine, include
fraud, improper conduct, evasion of tax, acting as an agent for shareholders,
and situations where public interest so requires.
The OPC presents a
heightened susceptibility to veil-lifting for tax evasion, a concern identified
by several academic commentators. Since the sole member and sole director of an
OPC are the same person, the structural fusion of managerial and proprietary
roles creates conditions in which the classical ‘Insubordinated Agency Rule’
which asks whether the company is merely acting as the agent of its sole
shareholder may more readily be triggered against an OPC than against
multi-member companies. This doctrinal tension remains a structurally
unresolved challenge in the Indian OPC framework.
CRITICAL ANALYSIS:
ADVANTAGES AND DISADVANTAGES
The most compelling
advantage of the OPC is the conferral of limited liability upon a sole
entrepreneur, a benefit previously accessible only to those who could form a
company with at least two members. Under sole proprietorship, the proprietor’s
personal assets were at perpetual risk for any business liability. The OPC
guarantees that the sole member’s financial exposure is capped at the capital
invested in the company.
·
Separate Legal Entity and
Perpetual Succession
As confirmed by Salomon and Tata Locomotive, the OPC possesses a legal identity entirely
independent of its sole member. It may own property, enter into contracts, sue
and be sued, and continue in existence notwithstanding the death, incapacity,
or change of membership of its human controllers. The nominee mechanism under
Rule 4 of the Incorporation Rules, 2014, ensures business continuity, a feature
entirely absent from sole proprietorship, which dissolves upon the proprietor’s
death.
·
Ease of Management and
Decision-Making
The OPC’s single-member
governance structure eliminates the internal friction inherent in
multi-director companies, board disagreements, voting deadlocks, and
shareholder disputes. The sole member may pass resolutions by written entry in
the minutes book, without convening formal meetings. This ‘monopoly in
management’, as one commentator described it, enables rapid and responsive
decision-making that is structurally impossible in conventional companies.
The Companies Act, 2013
and the Incorporation Rules, 2014 exempt OPCs from several compliance
requirements applicable to private limited companies notably, the requirement
to hold AGMs, the obligation to prepare a Cash Flow Statement, and the
extension of time for filing financial statements. These relaxations align with
the JJ Irani Committee’s recommendation that OPCs should be given a ‘simpler
regime through exemptions’.
·
Enhanced Business
Credibility and Access to Finance
Unlike sole
proprietorships, OPCs are registered entities subject to the Registrar of
Companies. This institutional recognition confers a degree of credibility that
facilitates access to bank loans and institutional credit, financial
institutions being more willing to lend to a corporate entity than to an
unregistered proprietorship.
Disadvantages and
Critical Limitations
This is perhaps the most
structurally significant deficiency of the Indian OPC regime. Contrary to the
expectation of micro-entrepreneurs, OPCs are taxed as private limited companies at a flat rate of 30% on net profits, plus applicable surcharge and cess. No
recognition of the OPC as a distinct taxable category was made under the Income
Tax Act, 1961, meaning that OPCs derive no tax advantage over the more
expensive private limited company structure.
In sharp contrast, a sole
proprietorship is taxed at the individual’s slab rate under the Income Tax Act,
which, for lower-income entrepreneurs, yields a substantially lighter tax
burden. Additionally, the dividend distributed by an OPC is subject to Dividend
Distribution Tax (DDT), and the sole member receiving the dividend is taxed
further, producing an effective combined tax rate that can exceed 60%. This
double taxation structure is a serious disincentive to the use of OPCs by small
entrepreneurs — ironically, the very constituency the concept was designed to
benefit.
·
High Compliance and
Incorporation Cost
While OPCs enjoy certain
exemptions, they must nonetheless comply with annual audit requirements, ROC
filings (Forms AOC-4 and MGT-7), and board meeting minutes, obligations that
require the engagement of Chartered Accountants, Company Secretaries, and legal
professionals at considerable expense. The estimated annual compliance costs
for an OPC is a minimum of Rs 10,000–15,000 per annum, comparable to, and in
some respects exceeding, those applicable to a private limited company. For
micro-entrepreneurs with modest turnovers, these costs represent a
disproportionate drain on resources.
The mandatory conversion
threshold -paid-up capital exceeding Rs 50 lakh or turnover exceeding Rs 2 crore,
as a ‘growth ceiling’ on the OPC form. A commercially successful OPC was
compelled to transform into a private limited company within six months of
exceeding these thresholds, regardless of whether the entrepreneur was prepared
for the attendant administrative and governance changes. Simultaneously, the
two-year lock-in on voluntary conversion prevented an ambitious OPC founder
from upgrading to a private limited structure until his enterprise was at least
two years old, a restriction that impeded venture capital investment and equity
financing during the critical early growth phase.
·
Restrictions on Foreign
Direct Investment
Under the rules, OPCs
could not be incorporated by Non-Resident Indians, foreign nationals, or
foreign companies. This restriction foreclosed the possibility of using the OPC
as a subsidiary vehicle for foreign enterprises and prevented the Indian
diaspora from investing in India through this structure. Several academic
commentators argued that this restriction was inconsistent with India’s
professed commitment to Foreign Direct Investment (FDI) liberalisation under
the Make in India initiative launched
in September 2014.
·
Prohibition on
Non-Banking Financial Activities
OPCs are statutorily
prohibited from undertaking non-banking financial investment activities,
including investment in the securities of any corporate body. This restriction
significantly narrows the range of business activities available to the OPC
form and renders it unsuitable for entrepreneurs engaged in financial services,
investment advisory, or portfolio management, precisely the sectors in which
knowledge-intensive solo practitioners might most benefit from the limited
liability protection of the OPC structure.
The OPC’s structural
characteristics — a single member who simultaneously controls all corporate
decision-making, signing authority, and beneficial ownership — create unique
opportunities for misuse, including:
·
Tax evasion: The incorporation of an
OPC in the name of a family member, while the actual control remains with
another person, to shelter income from personal taxation.
·
Benami transactions: The use of OPCs as
opaque vehicles for holding assets or conducting transactions that a natural
person might wish to disguise from regulatory scrutiny.
·
Fraudulent trading: Given the single-member
governance structure, there is no internal check against a sole director’s
fraudulent conduct vis-ŕ-vis creditors or the public.
The scholars recognised
that the fusion of managerial and proprietary roles in the OPC, while efficient,
eliminates the mutual oversight that multi-member structures provide, creating
conditions for corporate governance failures of a qualitatively different order
than those present in conventional companies.
·
Lack of Employee Stock
Options and Equity Incentives
OPCs are structurally
incapable of offering Employee Stock Options (ESOPs) or sweat equity shares,
since they are limited to a single shareholder. This restriction significantly
reduces the OPC’s ability to attract and retain talent through equity-based
compensation, a critical disadvantage in India’s emerging startup ecosystem
where human capital is the primary driver of value creation.
ONE PERSON COMPANY IN
CONTEXT: A COMPARATIVE EVALUATION
A comparative analysis of
the OPC against the two most proximate business forms in India- Sole
Proprietorship and Private Limited Company reveals the following:
|
Parameter |
Sole Proprietorship |
OPC |
Private Limited Company |
|
Legal Status |
Not a separate entity |
Separate legal entity |
Separate legal entity |
|
Liability |
Unlimited |
Limited to capital
invested |
Limited to capital
invested |
|
Minimum Members |
1 |
1 (+ nominee) |
2 |
|
Minimum Directors |
None required |
1 (max 15) |
2 (max 15) |
|
Annual Compliance |
Income Tax return only |
ROC filings, audit
required |
ROC filings, audit
required |
|
Taxation |
Individual slab rate |
Corporate flat rate
(30%) |
Corporate flat rate
(25–30%) |
|
Foreign Ownership |
Not permitted |
Not permitted |
Permitted (FEMA routes) |
|
AGM Required |
No |
No (exempted) |
Yes |
|
Nominee Required |
No |
Yes (mandatory) |
No |
|
Perpetual Succession |
No |
Yes |
Yes |
|
ESOPs |
Not possible |
Not possible |
Possible |
This analysis reflects
that the OPC occupies a genuine but narrow middle ground between the two forms.
Its advantages over sole proprietorship are real, particularly in terms of
limited liability, legal personality, and access to finance. However, its
advantages over a private limited company are largely procedural rather than
substantive: the compliance savings do not offset the tax inefficiency, and the
conversion thresholds impose a growth ceiling that a private limited company
does not face.
CONCLUSION AND SUGGESTIONS
The One Person Company is
an innovative and conceptually sound addition to India’s corporate law
architecture. Its introduction through the Companies Act, 2013 represents a
belated but welcome alignment of Indian law with the global trend of
recognising single-person economic entities. The jurisprudential foundation
provided by Salomon, Lee, and Macaura gives the OPC an intellectually robust basis rooted in over
a century of common law development.
However, a critical
analysis of the legal framework reveals that the OPC as constituted in
2013–2017 fell short of fulfilling its transformative potential. The principal
deficiencies are as follows:
Ř The OPC should be
recognised as a distinct taxable category under the Income Tax Act, 1961, with
taxation at rates more favourable than the private limited company rate, to
incentivise transition from informal sole proprietorship.
Ř The restriction on NRI
and foreign incorporation of OPCs, should be lifted to align the OPC with India’s
FDI policy goals.
Ř The rigid paid-up capital
and turnover thresholds for compulsory conversion, and the two-year lock-in on
voluntary conversion, should be relaxed or eliminated to allow OPC
entrepreneurs to chart their own growth trajectories.
Ř Given the structural
vulnerabilities of single-person control, the legislature should consider
mandatory external auditor appointment requirements and strengthened creditor
protection provisions to reduce the misuse potential of the OPC form.
There is a limited
penetration of the OPC concept among India’s vast community of small and micro
entrepreneurs. Only 478 registrations in the first five months of operation
suggests that awareness, outreach, and simplified registration procedures are
essential complements to legislative reform.
In its essence, the One
Person Company is, as Salomon taught
us more than a century ago, a company in the fullest legal sense possessed of personality,
purpose, and perpetuity that transcend the individual behind it. India’s task,
is to ensure that the legal shell is filled with the economic substance that
its architects intended.
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