MCA has introduced the Concept of One Person Company so that the Proprietorship business can also get the Corporate Frame work with minimum compliances in a Year. It is still in its nascent stages and will require more time to be fully accepted by the business world.
Benefits:
- Minimal papers work and compliances.
- Ability to form a separate legal entity with just one member.
What is One Person Company:
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”
Sections: (Section-3, Section 4 and Section- 5, Schedule – I, Rule-3 & 4 of Chapter II of the Companies (Incorporation), Rules, 2014)
POINTS TO BE NOTED AT THE TIME OF INCORPORATION OF THE OPC:
1. 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.
2. A person can be a shareholder in only ONE OPC at a time. He cannot incorporate two OPC. He can also be Nominee in one OPC)
Eg: If Mr. A is a member in ABC (OPC) Pvt Ltd and a nominee in XYZ (OPC) Pvt Ltd, then he suffices the above condition.
However, If Mr A is a member in ABC (OPC) Pvt Ltd then he cannot become a member in XYZ (OPC) Pvt Ltd. He can only be a nominee.
If Mr. A the person so nominated in XYZ OPC Pvt Ltd becomes the member of that One Person Company and is already a member of ABC OPC Pvt Ltd, at the same time, by virtue of rules has to decide within 6 months which one person company he has to continue. Member can change the nominee any time and has to inform the ROC.
3. No minor person shall become member or nominee of the One Person Company or can hold share with beneficial interest.
4. Such Company cannot carry out Non-Banking Financial Investment activities including investment in securities of anybody corporate.(i.e it cannot carry NBFC Activities, nor can it be a member of an NBFC Company)
5. Such Company cannot be incorporated or converted into a company under section 8 of the Act.
6. 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. Once the limit is crossed, it is required to file form INC-5 informing that it is required to convert itself into a private Company by the virtue of capital/average turnover having exceeded the limit.
7. The provisions of Section 98 and Sec 100 to 111 (both inclusive), relating to holding of general meeting shall not apply to One Person Company.
8. OPC can have minimum 1 director but maximum 15 directors which can be increased by passing a special resolution as in case of any other company.
9. For One Person Companies, at least one Board meeting must be held in each half of calendar year and gap between two meetings should not be more than 90 days. The Company can do away with this requirement if there is only one Director.
10. Financial statement to be filed with ROC within a period of 180 days from closure of financial year.
11. Annual Return shall be signed by the Company Secretary or where there is no Company Secretary by the directors of The Company.
12. INC-4 shall be filed in case of withdrawal of consent by Nominee or in case of intimation of change in nominee by member.
13. The Company shall inform the registrar of every contract entered into by the Company and recorded in the minutes of meeting of Board of Directors within a period of 15 days from the date of approval by Board. However, nothing shall apply to contract entered in the ordinary course of business.
Process for Incorporation of One Person Company:
One Person Company can be incorporated with the new introduced SPICE Form. Let’s see the procedure:
1. Obtain Digital Signature of Directors and subscribers
2. Then apply for DIN in Form DIR-3 with the following attachments:
- Identity of applicant: PAN of the person
- Residence Proof of applicant: Aadhar card, driving License, passport, election card,
- ration card, electricity bill, telephone bill.
3. Post DIN Application, file Form INC-1 with ROC for name application where you can apply for maximum 6 names as per the preference, out of which one would be alloted. The name approved is valid for 60 days within which the Company is to be incorporated.
4. Once, the name is approved, the following forms will be filed for Company incorporation:
- SPICE Form 32 ,
- SPICE Form 33 (e MOA),
- SPICE Form 34 (e AOA).
Attachments to SPICE Form 32
- DIR-2 (consent of the director)
- Declaration from the subscriber cum directors for non-acceptance of deposits (on stamp paper)
- INC-3 Form of the nominee (for Consent)
- Utility bill
- NOC from the owner in case of rent or lease
- INC-9 from the subscriber cum director(on stamp paper)
- PAN, Identity proof and address proof of subscriber and nominee
No attachments for SPICE MOA- INC-33 and SPICE AOA- INC-34.
Once the documents are ready, upload the Forms on the MCA Website. Make sure that the content of the attachments are clearly visible as there can be chance of resubmission and the nominee clause to be correctly entered in the AOA.
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) by the following link Home> MCA Services> E-Forms> Submit Application for PAN and TAN
Download the PAN and TAN Application, attach the DSC of the person and upload both the forms.
Note that Forms won’t be processed for approval until the PAN and TAN Forms are uploaded. 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.
Please refer all the relevant sections, rules, amendments and consider all the necessary requirements as applicable. The author is not responsible for any losses caused or incurred.
The content is merely for sharing knowledge. Author Can be reached at caswetamakwana@gmail.com or 9819244185.
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