What are the drawbacks of one person company?

What are the drawbacks of one person company?

There are few demerits/disadvantages associated with One Person Company (OPC) registration.

Few drawbacks of One Person Company (OPC) registration are as follows:

  • A One Person Company (OPC) cannot raise funding by selling its shares and hence not preferred for startups.
  • It increases the compliance cost yearly because audit and other compliance are mandatory irrespective of turnover.
  • It cannot be converted into private company voluntary before two years from the date of incorporation.

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