ONE PERSON COMPANY
One Person Company means a Company which has only one person as a member. It gives a single promoter full control over the Company while limiting his/her liability to contributions to business. It is classified as Private Company under the Companies Act, 2013.One Person Company is a separate legal entity from its members.
BENEFITS OF FORMING A ONE PERSON COMPANY:
a) Limited liability: In a One Person Company the liability of the single shareholder is limited to the unpaid subscription money. The liability of the members in respect of the company’s debts is limited.
b) Separate Legal Entity: A Company is a separate legal entity from its members. The company is distinct from that of its owner, the personal assets of the member remain protected in case of a credit default.
c) Easy to manage: In One Person Company there is only single shareholder this leads to fast decision making and execution.
d) Less Compliance: OPC is one of the easiest forms of corporate entities to manage. Very few ROC filing is to be filed with the Registrar of Companies (ROC). No need to conduct Annual General Meeting (AGM) and only two board meetings are required in a calendar year.
e) Borrowing Capacity: Banking and financial institutions prefer to lend money to the company rather than Sole Proprietorship and Partnership Firms.
f) Total Control: Entrepreneurs who want total control over their operations can use the OPC formation to run their company as they please, instead of finding a partner who have other ideas.
IMPORTANT POINTS UNDER ONE PERSON COMPANY
a) Only a natural person who is resident in India and citizen of India can only be appointed as member of One Person Company.
b) Maximum turnover a One Person Company can make is 2 Crore.
c) Only one shareholder is allowed in One Person Company.
d) Any amount of share capital. No Minimum requirement.
e) Director Identification Number [DIN] for the director.
f) Digital Signature Certificates [DSC] for the director.
INCORPORATION/REGISTRATION PROCESS FOR ONE PERSON COMPANY
To register/incorporate a One Person Company it involves two basic and simple steps:
Step 1: Acquire and Register DSC
First, apply for Digital Signature Certificate (DSC), whichis used to sign on behalf of you in E-forms. Since the filings of application are done through online, director of the Company should posses DSC.
Register DSC: The DSC once issued by the certifying authority should be registered by Role check on MCA21 portal as only then the DSC can be used for online filings of Company E-forms.
Step 2: Filing of Incorporation Documentsin form INC-29
Once we obtain the DSC, We have to start the process of drafting documents for incorporation.
E-Form INC-29 deals with the single application for approval of name of the company, incorporation of a new company and/or application for allotment of DIN. This e-Form is accompanied by supporting documents including details of Director & subscriber, MOA and AOA etc.
Pay the prescribed registration fee as per Company Incorporation Rules, based on the total capital of subscribers in the proposed Company.
Once the e-Form is processed and found complete, company would be registered and CIN would be allocated. Also DIN gets issued to the proposed Director who do not have a valid DIN.
The ROC shall issue the certificate of incorporation in Form INC-11.
Note: Registered office of the proposed Company can be filed later after the Incorporation of Company within30days from the Incorporation of Company.
Important Matters to be kept in mind while preparing Form INC-29
1. Proposed Name of the Company: There was an option to provide Six different names for proposed company under the existing normal procedure, out of which one would be approved.
However, under Form INC-29 only one name for proposed company can be provided. Hence, it is necessary to ensure that the name which you are proposing should be unique and should not be even partially similar to existing names which are already registered.
2. Non-eligible Companies: Following types of Companies can be incorporated by using Form INC- 29
a. Private Limited Company
c. Producer Company
d. One Person Company
However, MCA has not allowed yet to incorporate Section 8 Company (Non-Profit Company) by using Form INC-29.
DOCUMENTS/INFORMATION REQUIRED FOR INCORPORATION
- Signed Original Application;
- One Color Photograph of the Applicant;
- Photograph should be crossed signed on the application;
- Signed Copy of PAN attested by Gazetted officer/ Bank Manager;
- Signed Copy of Address Proof attested by Gazetted officer/ Bank Manager;
- Valid Email Address;
- Mobile Number;
- Mother’s Name -in order to register the same on MCA.
Designated Identification number (DIN)
o ID Proof- self attested copy of PAN;
- Address Proof — self attested copy of voter ID or passport or Driving License;
- One Color Passport size Photograph;
- Area of Occupation (whether Self Employed / Professional/ Homemaker/ Student/ Servicemen);
- Educational Qualification Certificate;
- Valid Email Address;
- Mobile Number.
o Memorandum and Article of Association,Subscriber Sheet signed by thesubscribers to the shares;
o Affidavit by the Director in Form No.INC-9 on Rs. 10 stamp paper dulynotarized;
o Verification of Signature of Subscriberin Form No. INC-10 on Rs. 10 Stamp paper;
o Consent to act as director of a companyin Form No. DIR-2;
o Details of all the Companies whetherIndian and/or foreign in which he/she isalready director and also whether he/she is Proprietor/Partner in anyFirm/Partnership Firm or member ofBOI/AOP;
o Proof of Registered office of theProposed address of the Company(Latest Electricity Bill/MTNL LandlineBill/Water Bill/Registry Copy signed bythe owner) which should beaccompanied by NOC on Rs. 10 stamppaper duly notarized signed by theowner of the premises);
o Number of the shares subscribed by subscriber.
o Consent of nominee
o Proof of identity and residential address of the nominee