One Person Company

Advantages of Becoming One Person Company

Separate Legal Existence

The Company is considered an artificial person created by law, thus the existence of One Limited Company is distinct from its member that is not there in a proprietorship firm.It enjoys its own identity, and thus it can sue or be sued in its name and it can also possess the assets in its name.

Limited Liability

The characteristic of Limited Liability is like a cherry on the cake, the shareholders enjoy the privilege of having liability limited only up to the amount of shares subscribed. Hence unlike Partnership Firm, investors are attracted to this form of business.

No Minimum Capital Requirement

There is a misbelief that one requires huge investments to start a Company, though in reality there is no minimum capital requirement, one can start a One Person Company even with minimal amount.

Startup Benefits

Company is one of the most organized and trusted forms of business, it is recognized on all the platforms of governments, such as Startup India Registration, for availing the benefits one must be having the registered entity where One Person Company is available as one of the option. Further for registration under MSME, One Person Company is eligible.

Perpetual Existence

The existence of One Person Company is not dependent on any factor, hence member and directors of the company may change but it will not affect the status of the Company.



  Private Limited Company One Person Company Limited Liability Partnership Partnership Firm Proprietorship Firm
Act Companies Act, 2013 Companies Act, 2013 Limited Liability Partnership Act, 2008 Indian Partnership Act, 1932 No specified Act
Registration Requirement Mandatory Mandatory Mandatory Optional No
Number of members 2 – 200 Only 1 2 – Unlimited 2 – 50 Only 1
Separate Legal Entity Yes Yes Yes No No
Liability Protection Limited Limited Limited Unlimited Unlimited
Statutory Audit Mandatory Mandatory Dependent Not mandatory Not mandatory
Ownership Transfer ability Yes No Yes No No
Uninterrupted Existence Yes Yes Yes No No
Foreign Participation Allowed Not Allowed Allowed Not Allowed Not Allowed
Tax Rates Moderate Moderate High High Low
Statutory Compliance High Moderate Moderate Less Less