ONE PERSON COMPANY [Sec 2(62)]:
The creation of a One Person Company (OPC) was recently instigated as a significant improvement over sole proprietorship. In the year 2005, the JJ Irani Expert Committee recommended the formation of the OPC.
Basically, it is a kind of private company with some unique features. OPC means a company which has only one person as a member.
PRIVILEGES/EXEMPTIONS TO ONE PERSON COMPANIES:
Under the Companies Act, 2013, the following privileges and exemptions are provided to one person companies:
1) There is no requirement to hold an annual general meeting.
2) Provisions for independent directors do not apply.
3) The financial statements of these companies do not include cash flow statements.
4) Signing of annual returns by the company secretary is not required; directors can also do so.
5) Provisions relating to meetings and quorum do not apply.
6) Provisions related to retirement by rotation are not applicable.
7) The requirement of a minimum number of meetings of the Board of Directors to be held does not apply to the OPC having one director.
BENEFITS OF ONE PERSON COMPANY:
1) Liability: The liability of the member is limited.
2) Minimum Paid-up Capital: There is no requirement for minimum paid up capital.
3) Perpetual Succession: The single member can appoint a nominee who can carry out the business, after the death of the member.
4) Minimal tax Advantage
5) Compliance Requirements: There are lesser compliance requirements for one person company as compared to private and public Companies.
6) Easy incorporation process
7) Sole ownership and control
DOCUMENTS REQUIRED FOR INCORPORATION OF ONE PERSON COMPANY:
The list of documents required at the time of incorporation:
- Copy of Pan card
- Latest bank statement/ electricity bill/mobile bill
- Passport sized photograph
- Specimen signature
- Copy of Aadhar card
- Passport in case of NRIs
Note: All the documents must be self-attested.
Documents required by the Registered Office:
1) Address Proof of Registered Office
Any one of the following:
- Electricity Bill/Telephone Bill; (not more than 2 months old.)
- Water Bill/Gas Bill (not more than 2 months old.)
The Non-Objection Certificate (NOC) from the landlord is required, if the member owns the property.
The rent agreement/lease deed is required, If, in case, the property of the business is rented.
PROCESS OF INCORPORATION OF ONE PERSON COMPANY:
Step 1: Apply for DSC
The first step is to get the Digital Signature Certificate (DSC) from the directors, along with the required documents:
- Address Proof
- Mobile number and Email Id
- Residence Proof
- Photograph
Step 2: Apply for DIN
The second step is to apply for the Director Identification Number (DIN) in the SPICe Form, along with the director’s details.
Step 3: Name Reservation
The third step in the incorporation process of a One Person Company is to make an application with the concerned Registrar. Once the MCA approves the name, the applicant can proceed further for incorporation.
Step 4: Filing of Forms with MCA
The next step is to file and upload all the necessary forms to the MCA portal. There is no requirement for filing of separate applications for PAN and TAN numbers.
Step 5: Certificate of Incorporation
After being satisfied, The Registrar of Companies (ROC) will issue a Certificate of Incorporation to the Company.
POINTS TO REMEMBER:
1) No minor shall become a member or nominee of the One Person Company.
2) It cannot be incorporated or converted into section 8 of the Act.
3) One Person Company cannot perform Non-Banking Financial Investment activities including investment in the securities of the corporates.
4) No minor shall hold a share with a beneficial interest.
5) Cannot convert itself voluntarily into any other kind of company before the 2 years from the date of incorporation.
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