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One Person Company
Finally, New companies act 2013 has
provision for incorporation of “One Person
Company”. This was need of hour and finally
Indian Government has given its assent to
it.
One
Person Company is a new vehicle/form of
business, enabling Entrepreneurs carrying on
the business as Sole-Proprietor to enter
into a Corporate Framework.
Such companies have only one member it
enjoys certain privileges / relaxations /
exemptions compared to other companies.
Though the concept of One Person Company is
new in India but it is a very successful
form of business in UK and several European
countries since a very long time now.
One Person Company will give the young
businessman all benefits of a private
limited company which categorically means
they will have access to credits, bank
loans, limited liability, legal protection
for business, access to market etc all in
the name of a separate legal entity.
Section 3 of the New Companies Act, 2013
provides for the incorporation of One Person
Company.
This Company shall be a private Limited
Company.
The Company can have one or two Directors,
who can be different from the promoter. The
promoter can also act as a sole Director of
the Company.
It is required for One Person Company to
also indicate the name of other person in
Memorandum who shall act in case of death or
incapacity of one person.
Only a natural person who is an Indian
citizen and resident in India (as defined)
shall be eligible to incorporate a One
Person Company and also shall be a nominee
for the sole member of a One Person Company.
One Person Company cannot carry out
Non-Banking Financial Investment activities
including investment in securities of any
body corporate.
It will be necessary to mention “one person
company” wherever the name is printed or
affixed.
One Person Company cannot be converted
voluntarily into any kind of company unless
two years have expired from the date of
incorporation, except threshold limit (paid
up share capital) is increased beyond fifty
lakh rupees or its average annual turnover
during the relevant period exceeds two crore
rupees.
There are various forms to be filed for
details of Nominee members, Application for
reserving the name of the Company, the
details of Incorporation needs, the
affidavit, Signature to be etc.
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