REGISTER ONE PERSON COMPANY
One Person Company was introduced in 2014 to promote entrepreneurship. Section 2(62) of the Companies Act, 2013 defines “one person company” as a company which has only one person as member. An OPC is treated just like a Private limited company.
One Person Company is different from sole proprietorship. OPC ensures limited liability to the owner of the company thus saving the entrepreneur from risking his personal assets in case company is incurring huge losses.
One person company enjoys several privileges like operation with a single director, it is not required to hold annual general meeting, mandatory rotation of auditors is not applicable, etc.
Some of the restrictions in forming a One Person Company are:
- A person who is a nominee or a member of an OPC will not be able to become a member or nominee in more than one such company.
- No minor can become a member or a nominee of a One Person Company or can hold a share with beneficial interest.
- OPC cannot be incorporated or converted into a section 8 company.
- OPC cannot carry out non-banking financial investment activities including investment in securities of any body corporate.
- OPC cannot convert itself voluntarily into any kind of company unless 2 years have passed from the date of incorporation except when the company’s turnover exceeds Rs.200 lacs or when it’s paid up capital increases Rs. 50 lacs.
Therefore if a person is expecting huge turnover of the business in short period of time then One Person Company may not be viable option.
MINIMUM REQUIREMENTSFOR ONE PERSON COMPANY:
- One director
- One member
- Application of Director Identification Number (DIN)
- DSC (Digital Signature Certificate)
PROCEDURE FOR REGISTRATION OF ONE PERSON COMPANY:
- Apply for Digital Signature Certificate (DSC).
- Obtain Director Identification Number (DIN).
- Name approval for the company.
- Submission of final documents to the Registrar Of Companies (RoC).