The new Companies Act, 2013 has introduced a new form of Business which enables the Individuals or Entrepreneurs to carry on the business of Sole Proprietorship by entering into the corporate world. One Person Company is an amalgam of Sole Proprietorship and a company form of Business with an extreme advantage of relaxed requirements of Law. One Person Company would boost the confidence of small and medium Entrepreneurs. This concept grants the Entrepreneurs to enjoy the advantage of Limited Liability plus Corporatization.
- Only One Director can start a company and there is no bar on maximum number of Directors.
- Only one Shareholder/ Member is required to start up a company, provided that only a natural person being a resident in India can be a member of One Person Company.
- A nominee is appointed by member who will become member in his place in case of his death or incapacity to act as such.
- Compliance burden is very less.
- No such stringent rules and regulations applicable to One Person Company.
- Obtain Digital Signature Certificate [DSC] for the proposed Director.
- Obtain Director Identification Number [DIN] for the proposed Director.
- One Person Company shall be incorporated as a Private Company and required to have a minimum paid up capital of Rs. One Lakh.
- Select suitable Company Name, and make an application in Form INC 1 for name availability.
- Draft Memorandum of Association and Articles of Association [MOA & AOA] and the Memorandum of Association of the company shall mention the name of the nominee nominated by the Subscriber.
- Sign and file various Forms for incorporation of Company with Registrar of Companies of respective state:
- Form INC - 2 (Application for Incorporation)
- INC - 3 for (Consent of Nominee)
- INC - 22 (Notice of Situation of Registered Office)
- MOA & AOA
Where the paid up share capital of One person Company exceeds Rs. 50 Lakhs or its average annual Turnover during the relevant period exceeds Rs. 2 crore, it shall cease to be entitled to continue as a One Person Company. And such company shall be required to convert itself within 6 months of the date on which paid up share capital or annual turnover increased beyond the above prescribed limit into either Private Company or Public Company by complying with the provisions of respective company as per the New Companies Act, 2013.