One Person Company

One Person Company INR - 20,000.00

One person company is a new concept in India which has been introduced by the companies act 2013. In the old Companies act 1956 a minimum of two directors and shareholders were required to form a private limited company. However in case of a One person company, only 1 person is required who can be a shareholder as well as the Director. Hence the name, One Person Company.

1. One share holder: This is the fundamental concept of a One Person Company. In fact, One Person Company is defined in the Companies Act as a Company which has only one member. A single shareholder holds 100 percent shareholding. The thing to be kept in mind is that the Company Incorporation Rules provide that only a natural person who is a resident of india and also a citizen of india can form a one person company. It means that other legal entities like companies or societies or other corporate entities cannot form a one person company. Further it also means that Non resident Indians or Foreign citizens can not form a One person company. Further the rules also specify that a person can be a shareholder in only one one person company at any given time. It simply means an individual cannot have two different one person companies in his name. 2. One Director The other important point is that a One Person Company may have only one director. But at the same time there is no bar on more number of directors. However, as per the Act, the total number of directors shall not be more than 15. As per the Companies Act, if nothing is mentioned in the incorporation document, it would be assumed the sole shareholder shall also be the sole director in the one person company and which shall be practically the case in most One Person Companies incorporated. 3. Nominee This is a very important concept where the person forming the One Person Company has to nominate a Nominee with his written consent who, in the event of death or inability to contract of the owner of the One Person Company, shall come forward and take over the reins of the one person company. Please note that the requirements of being a resident Indian and citizen of India also apply to the nominee. Further if the person so nominated becomes the member of such a One Person Company and is already a member of another One Person Company, at the same time, by virtue of rules has to decide within 6 months which one person company he has to continue. One more thing, the member can change the nominee at any point of time. On the death of the sole member, the nominee shall be the person recognized by the company as having title to all the shares of the member. Such nominee shall be entitled to the same dividends and other rights and liabilities to which such sole member of the company was entitled or liable. On becoming member, such nominee shall nominate any other person with the prior written consent of such person who, shall in the event of the death of the member, become the member of the company

Since nothing has been specified as such by the finance ministry, it is assumed that the rates of taxation applicable for a private limited company shall apply to a One Person Company. Net profits, which are calculated by deducting all allowable expenses from the turnover of sales, shall be taxable at the rate of 30 percentage + education cess.

One Person Company also gets freedom from complying with many requirements as normally applicable to other private limited Companies. Certain sections like Section 96, 98 and sections 100 to 111 are not applicable for a One Person Company. Some of these are mentioned below: – No requirement to hold annual or extra ordinary general meetings. Only the resolution shall be communicated by the member of the company and entered in the minutes book and signed and dated by the member and such date shall be deemed to be the date of meeting. – For the purposes of holding board meetings, in case of a OPC which has only One director, it shall be sufficient compliance if all resolutions required to be passed by such a company at a board meeting are entered in a minute book – signed and dated by the member and such date shall be deemed to have the date of the board meeting for all the purposes under Companies Act, 2013. – No requirement of preparing cash Flow in the annual financial statements Annual returns can be signed by the Director himself instead of A Company Secretary

The process of incorporation of a one person company is a very simple one. First the sole shareholder shall get a Director Identification Number (DIN) as well as a digital signature certificate. Then he should apply for the name of the company After that he should get the consent of the nominee in the prescribed forms. Then he shall file the consent along with the final incorporation forms with theMemorandum and Articles and other required documents After that he shall receive the final incorporation certificate from the register of companies. Now he can commence business under the name. Please note that that the words ‘‘One Person Company’’ shall be mentioned in brackets below the name of such company, wherever its name is printed, affixed or engraved.

Documents required for Incorporating a One Person Company 1. Copy of PAN ( Permanent Account Number) of all 1 Promoter and 1 Nominee Director 2. Copy of Address Proof ( Voter Id, Passport, Driving License, Aadhar Card) of all 1 Promoter and 1 Nominee Director 3. Latest passport size Photographs of of all 1 Promoter and 1 Nominee Director 4. Utility Bill (Electricty Bill) of premises proposed to be the registered office. In case Premises is taken on Rent / Lease ( Rent agreement will also be required) 5. Copy of Mobile bill, telephone bill, electricity bill or bank statement supporting the address proof of of all 1 Promoter and 1 Nominee Director

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