One Person Company (OPC)

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.

--Ishan Kulkarni

Business Plans Or Fiction Novels?

Every second day I meet a new person and the typical conversation that follows is this:

A: This is my product XYZ. It will take about ddd million as investment. I have roped in DEF as the technical director. He will take care of production/deliverables. I will do the selling. Margins are 45%. I hope for GHI millions as turnover by 2015.

Me: ok!

So why do these plans not excite me? 90% of the times my reaction is a cold ok. Let me make it clear: frankly being enthusiastic, having the willingness to toil and vision to succeed are not the only things that will take your business ahead.

Logic is: NOT having these qualities will surely mean failure but having them will give you SOME leverage that you MIGHT succeed.

My experience has shown me the following facts:

Majority of the startups fail. The plans which were envisioned are never achieved. So what do these enthusiastic  entrepreneurs lack?

A Propelis Study:

Myself and our Research Team decided to dig deeper into reasons for Corporate Failures.

Our Key Findings:

What's the aim of business we asked ourselves. The answer was: the purpose of business is to create a customer. If a customer/consumer is created rest of the things fall in place.

So stop making those meaningless projections, those Spreadsheets, the write ups, the statistics, ratios etc.

If you are not clear who will be your customer, what are his needs, why he/she will choose your product or service, you will never be able to sustain your business. 

By:

Ashutosh Muglikar