Privileges of a One Person Company

One Person Company Advantages

The privileges and exemptions enjoyed by a one person company or its advantages over other companies are as follows:

1. The financial statement, with respect to One Person Company, may not include the cash flow statement.
2. Financial assistance can be taken by the member from the OPC for purchase of or subscribing to its own shares.
3. The annual return shall be signed by the company secretary, or where there is no company secretary, by the director of the company. In other words it need not be signed by a company secretary in practice.
4. Need not hold annual general meeting.
5. Need not prepare a report on Annual General Meeting.
6. The provisions of section 98 and sections 100 to 111 (both inclusive) of Chapter VII shall not apply to a One Person Company.
7. For any business which is required to be transacted at an annual general meeting or other general meeting of a company by means of an ordinary or special resolution, it shall be sufficient if, in case of One Person Company, the resolution is communicated by the member to the company and entered in the minutes-book required to be maintained under section 118 and signed and dated by the member and such date shall be deemed to be the date of the meeting for all the purposes under this Act.
8. Where there is only one director on the Board of Director of a One Person Company and any business is required to be transacted at the meeting of the Board of Directors of the company, it shall be sufficient if, in case of such One Person Company, the resolution by such director is entered in the minutes-book required to be maintained under section 118 and signed and dated by such director and such date shall be deemed to be the date of the meeting of the Board of Directors for all purposes under this Act.
9. Financial statement and Board’s report can be signed only by one director.
10. Need not prepare a statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors.
11. In case of a One Person Company, Board’s report shall mean only a report containing explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report.
12. File a copy of the financial statements duly adopted by its member, along with all the documents which are required to be attached to such financial statements, within 180 days from the closure of the financial year.
13. One person company need not to have more than one director on its Board.
14. Need not to appoint Independent directors on its Board.
15. Retirement by rotation is not applicable.
16. Additional grounds for disqualification for appointment as a director may be specified by way of articles.
17. Restrictive provisions regarding total number of directorships which a person may hold in a public company do not include directorships held in One Person Company which are neither holding nor subsidiary company of a public company.
18. Additional grounds for vacation of office of a director may be provided in the Articles.
19. It is required to hold at least one meeting of the Board of Directors in each half of a calendar year and the gap between the two meetings should not be less than ninety days. For an OPC having only 1 director, the provisions of section 173 (Meetings of board) and section 174 (Quorum for meetings of Board) will not apply.
20. The provisions relating to contract of employment with managing or whole-time directors does not apply to a One Person Company.
    
21. Total managerial remuneration payable by a one person company, to its directors, including managing director and whole-time director, and its manager in respect of any financial year may exceed eleven percent of the net profits.