CA Neeraj Bansal
Concept of One Person Company:
The concept of one Person Company in India is brought from the foreign countries. This is brought into India for the smooth running and to form a new legal entity by an individual. Before applicability of the Companies act 2013, an individual legally can form only his sole proprietorship in India and no other option remain to him. Before the applicability of Companies act 2013, Individual had to search a reliable, genuine, and honest partner to form a private limited company.
Now, with the applicability of the Companies act 2013, the requirement of two or more person is not required. Now a person who wishes to incorporate a private limited company can form individually without the involvement, share of any other individual. This is really a great concept introduced by the concept in the interest of the new entrepreneur who want to start the business by forming private limited company but could not do the same. Now ‘One Person Company’ can be formed.
As per Section 2 (62) of the companies act 2013 ““One Person Company” means a company which has only one person as a member”
The following are some other features of the One Person company:-
Compliance requirement in ‘One Person Company’:
Forms for Incorporation of ‘One Person Company’:
This is the good step by the government which is brought from the foreign. If we see it by the view of income tax provisions, the ‘one person company’ is to be taxed with the higher rate as the other private limited companies and the dividend distribution tax under 2(22)(e) is also applicable on the ‘One person Company’. So to promote the new model of the company, government should give some tax benefits so that people attract to form the company under this new model called ‘One Person Company’.
(Author can be Reached at firstname.lastname@example.org)