Steps to Continue the business if you are the remaining single director
The corporation requires a board of directors and the shareholders to keep its business going smoothly. What if there are entities where there is only one single member left? For a private company if only one single director is left then that entity comes under One person company. An OPC can have only one shareholder and one director and hold a private limited status.
A basic corporate structure involves three types of participants
- Shareholders own the company via stock. They elect members to the board of directors.
- The board of directors represents shareholder interests to guide the company. Board members appoint the officers.
- Officers manage the company on a day-to-day basis.
The same structure applies to a single shareholder corporation. But in this case, the same person occupies all three positions.
Sec 2 (62) of Companies Act 2013 states that “one person company” means a company which has only one person as to its member. There are certain benefits/exemptions given to OPC because OPC is a concept of Single-member Company and its not possible for a single member to follow all the mandatory compliances of Private limited companies.
There are a few advantages that a person has as he is the only member left of the company
1. Person’s identity is distinct from that of its owner. Therefore, if the firm is embroiled in a legal controversy, the owner will not be sued, only the company will.
2. limited liability: Since the company is distinct from that of its owner, the personal assets of the shareholders and directors remain protected in case of a credit default. However, a proprietorship offers no such advantage.
4. Tax Flexibility and savings
5. Easy to get a loan from banks
6. Complete control over the company
By Legex.in
