After the implementation of new Companies Act, 2013, the concept of "One Person Company" has become buzz word. Corporate industry recognizes only one type i.w. "Limited Company:. Nowadays Limited Liability Partnership vehicle is getting best response because its own advantages. I was studying new rules and regulations of OPCs and found interesting stuff in this. Less complex structure, less legal formlities, easy conversion option into Private / Public Limited Company and less Government intervention are the plus points of OPC. Any person who is running business as a proprietor may consider this option. The biggest benefit is it gets "Corporate" status being a legal entity formed under the Companies Act.
While analyzing few provisions of the Act, it is clear that this is a small vehicle like Maruti 800 and not any other hatchback or sedan car. You cannot drive your Maruti 800 on expressways with full speed because of its own limitations. I believe you will understand this example! Let me come straight to the point. OPCs have its own limits, once you gets close to maximum limits, by virtue of law, your OPC will get converted into Private / Public Limited Company. Provisions of the law states that when any OPC crosses a turnover of Rs. 2 crores or paid up capital exceeds Rs. 50 lakhs, you have to switch onto Limited Company without any option. I think for small businessmen or traders can take advantage of this form of vehicle at initial stage at least for 2 years. Because once you form OPC, you cannot apply for conversion before expiry of 2 years from the date of formation.
I am sure coming days will decide the direction and the good response to One Person Companies, otherwise LLPs have already proven excellent form of an organization.