Incorporation of one person company by using new e-forms (Spice) under Companies Act 2013

An attempt has been made from my side to share my knowledge and experience regarding Incorporation of a One Person Company under Companies Act, 2013 in the form of an Article. This Article contains the definition, clarification, procedure, required e-forms and the other important points with including issues made by the ROC for Incorporation of a One Person Company (OPC) under Companies Act, 2013. I hope this article would be given some help to our professional working.

INTRODUCTION:

The new Companies Act 2013 having the one new provision of the “One Person Company”, under which a single person could constitute a Company and get personal freedom that allows the Professional skilled person to adopt the business of his choice under the One Person Company (OPC) concept. One Person Company of sole-proprietor and company form of business has been provided with concessional /relaxed requirements under the Companies Act, 2013. This new provision provides the corporate sector best growth by doing individually business. It would encourage corporatization of micro businesses and entrepreneurship.

APPLICABLE SECTIONS AND RULES OF THE COMPANIES ACT 2013:

Section-3, Section 4 and Section- 5, Schedule – I, Rule-3 & 4 of Chapter II of the Companies (Incorporation), Rules, 2014

DEFINITION:

The one person company is defined under the Section 2(62) of the Companies Act 2013 is “One Person Company” means a company which has only one person as a member”.

CLARIFICATION OF OPC:

Only a natural person who is an Indian citizen and resident in India shall be eligible to incorporate a One Person Company and shall be a nominee for the sole member of a One Person Company.

OPC may be registered as a private Company with one member and may also have at least one director.

In One Person Company, one person, where the company to be formed is to be One Person Company that is to say, a private company. The name of the one person company shall have suffixed with the name of One Person Company as “ABC (OPC) PRIVATE LIMITED” to distinguish it from other companies.

NOMINEE OF THE OPC:

The subscriber to the memorandum of a One Person Company shall nominate a person, by obtaining prior written consent of such person (in form INC-3), who shall, in the event of the subscriber’s death or his incapacity to contract, become the member of that One Person Company.

The consent of such nominee obtained in Form No. lNC-3 shall be attached in SPICE (Form No. lNC-32).

REQUIRED E-FORMS:

1. DIR- 3 (Application for allotment of DIN-Director Identification Number)

2. INC-1 (for name approval of the company)

3. SPICE- FORM INC-32 (incorporation of the company; with PAN & TAN application)

4. SPICE MOA- FORM  INC-33 (e-Memorandum of Association)

5. SPICE AOA- FORM INC-34 (e-Articles of Association)

Note: PAN & TAN application is auto generated form on the MCA portal after uploading the Spice e-forms (INC-32, 33, 34) with ROC, the PAN and TAN application is auto filled by the MCA System that are ready to file only after affixing the DSC of the same person(director).

REQUIRED DOCUMENTS WITH E-FORMS FOR INCORPORATION OF OPC:

For DIR- 3: For DIN application, the following attachments shall be there with DIR-3:

1. Identity of applicant: PAN of the person
2. Residence Proof of applicant: Aadhar card, driving License, passport, election card, ration card, electricity bill, telephone bill.

For INC-1: for application of the name approval of the company, no need to attach any documents. But; if the desire name of the proposed company is similar to any one company, in that case the NOC from the incorporated company will be there in the attachment of INC-1.

For SPICE FORM NO- 32: For incorporation of the Company, the following attachment shall be there with e-form:

1. DIR- 2 from director (word format form for consent of director).

2. INC-9 from subscriber cum director (word format form for affidavit on stamp paper).

3. INC-8 from practicing company secretary.

4. Affidavit from subscriber cum director for not acceptance of deposits (on stamp paper).

5. PAN of the both subscriber and nominee

6. identity & residential address  proof of subscriber and nominee

7. INC-3 from nominee (for consent)

8. Lease Agreement/ Rent Agreement with rent receipt

9. NOC by owner of the office (in case of rent/ lease)

10. Utility Bill (electricity bill, mobile bill)

For SPICE MOA- INC-33 and SPICE AOA- INC-34: attachment is not applicable.

PROCEDURES TO INCORPORATE OF THE “OPC”:

1. DSC: Obtain Digital Signature of the subscriber.

2. DIN: Obtain DIN (Director Identification Number) of the subscriber though the eform DIR-3.

3. Name availability of proposed company:Apply for the  name of the proposed company in e-form INC-1 (name approval of the Company)

Note- the person can apply the name of the company through e-form INC-1 OR in the same e-form SPICE (INC-32- for incorporation).

After approval of name, ROC will issue a Name availability letter w.r.t. approval for availability of the name to the proposed company.

4. Prepare the e-forms for incorporation: After approval of the name of the proposed company, prepare three e-forms SPICE INC-32, SPICE MOA- INC-33, SPICE AOA-INC-34 for the incorporation of the company. For that process of the incorporation, the ROC provides a period of 60 Daysfrom the date on which the application for reservation of the name made.

Note: The Memorandum of Association (MOA) and Article of Association (AOA) of the company are now in the form of e-forms that shall have to upload with the e-form SPICE.

5. Upload of the e-forms: upload all aforesaid three forms with the ROC on the MCA Portal.

6. Download the PAN & TAN application: After uploading the e-forms go for PAN & TAN Application of the company (using same SRN, generated at the time of the uploading the e-forms for the incorporation).

Link to download or upload PAN & TAN application:

Home> MCA Services> E-Forms> Submit Application for PAN and TAN

7. Upload the PAN  & TAN Application: after downloading the application of the PAN and TAN of the company, affix the DSC of the same person (director) and upload the both PAN and TAN application.

8. Waiting for the approval of the uploaded forms of the Company on the MCA Portal. The approval from the ROC will be received within two working days.

With the approval of the ROC, the Certificate of Corporation (COI) under Form No.INC-11  is to be issued by the Registrar of the Companies (ROC). The certificate of incorporation is having the PAN detail on it and the Detail of TAN is to be sent to the registered mail of the stakeholders.

POINTS TO BE NOTED AT THE TIME OF INCORPORATION OF THE OPC:

1. The definition of the OPC shall be there in the SPICE A OA (e-Articles of Association) of the company under the head of

2. The member and nominee should be a Natural Persons, Indian Citizens and Resident in India. The term resident in India means a person who has stayed in India for a period of not less than 182 days during the immediately preceding one calendar year.

3. A natural person shall not be member of more than a One Person Company at any point of time and the said person shall not be a nominee of more than a One Person Company.

4. No minor person shall become member or nominee of the One Person Company or can hold share with beneficial interest.

5. Such Company cannot carry out Non-Banking Financial Investment activities including investment in securities of anybody corporate.

6. Such Company cannot be incorporated or converted into a company under section 8 (Formation of Companies with Charitable Objects, etc) of the Act.

7. No such company can convert voluntarily into any kind of company unless two years is expired from the date of incorporation of One Person Company, 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.

EXEMPTIONS AVAILABLE TO “OPC” UNDER THE COMPANIES ACT, 2013:

> Section 96– Option to dispense with the requirement of holding an AGM.

> Section 98- Power of Tribunal to call meetings of members.

> Section 100- Calling of extraordinary general meeting.

> Section 101- Notice of meeting.

> Section 102- Statement to be annexed to notice.

> Section 103- Quorum for meetings.

> Section 104- Chairman of meetings.

> Section 105- Proxies.

> Section 106- Restriction on voting rights.

> Section 107- Voting by show of hands.

> Section 108- Voting through electronic means.

> Section 109- Demand for poll.

> Section 110- Postal ballot.

> Section 111- Circulation of members’ resolution.

SOME POINTS OF ISSUES MADE BY ROC FOR RE SUBMISSION OF E-FROMS:

There are two chances given for re submission available to the stakeholder. On the basis of my experience, I hereby mention some points. The following important points must be noted by everyone at the time of the incorporation of the OPC:

> Definition of the OPC shall be there in the SPICE AOA (e-Articles of Association) of the company under the head of Interpretation”.

> The INC-8 shall be there in attachment of the e-forms-SPICE.

> The identity and residential proof shall have clear vision.

> The name of the First Director shall be there in SPICE AOA (e-Article of Association).

> Nominee clause VII in SPICE MOA (e- Memorandum of Association) of the company shall be there correctly.

All Readers are advised to refer relevant provision of law before applying or accepting any of the point mentioned above or not. Author accepts no responsibility whatsoever and will not be liable for any losses, claims or damages which may arise because of the contents of this write up.

I hope that this article would be helpful to our professional working and endeavors under Companies Act, 2013. Thank you to visit and read this article. Kindly share your opinion.