One Person Company registration provides many benefits as the small scale industries in terms of funding. One person company is the latest way of setting up a business. It can be formed and operated by a single person. This person acts as a director and shareholder too. A one person company ensures complete control to the promoter over the firm/company and also provides flexibility in liability.
One Person company
Many start ups prefer this form of company these days.In One Person Company registration there are nominee and sole member. Both of them can be residents in India , Indian citizens and a natural person . Only a natural person who is an Indian citizen and resident in India can have the following rights:
- Is eligible to register or begin a One Person Company.
- Can be a nominee for the sole member of a One Person Company.
The term “resident in India” refers to a person who has stayed in India for not less than 182 days according to one calendar year preceding.
A person is eligible to be a member/nominee only in one OPC
- A person can neither register more than a single One person company nor can become a nominee in more than one OPC.
- A characteristic individual, being part in one individual organization i.e OPC as per this standard turns into a part in another such organization by righteousness of his being a candidate in that One individual , such individual will meet the qualification criteria determined above inside a time of one hundred and eighty days.
No minor can be a member / nominee of OPC :
No minor will progress toward becoming member or nominee of the One Person Company or can hold share with valuable intrigue.
The following are the list of prohibited activities :
- Such organization can’t be enlisted or changed over into an organization under segment 8 of the Act.
- Such organization can’t complete Non-Banking Financial Investment exercises incorporating interest in securities of anyone corporates.
No voluntary conversion into any other type of company before expiry of 2 years
No such company can convert voluntarily into any kind of company unless two years have expired from the date of One Person Company registration , except when threshold limit has increased beyond fifty lakh rupees or its average annual turnover during the relevant period exceeds two crore rupees.
The nomination of the member of OPC:
The member of a OPC will nominate a person, in the wake of acquiring earlier composed assent of such individual , who will , in case of the subscriber’s demise or his inadequacy to contract , turn into the member of that One Person Company.
The name of the individual nominated will be made reference to in the notice of One Person Company and such nomination in Form No.INC.2 alongside the assent of such chosen one got in Form No.INC.3 and charge as gave in the organizations Rules,2014 will be documented with the enlistment center at the season of company registration alongside its update and articles.
Withdrawal of assent by nominee:
The individual named by member from a One Person Company may , pull back his assent by giving a notice in keeping in touch with such sole part and to the One Person Company.
The sole part will name someone else as candidate inside fifteen days of the receipt of the notice of withdrawal and will send an implication of such selection in keeping in touch with the company, alongside the composed assent of such someone else so assigned in Form No.INC.3.
Change of nominee by sole member:
The member or subscriber of a One Person Company may , by suggestion in keeping in touch with the company , change the name of the individual assigned by him whenever for any reason incorporating into instance of death or in ability to contract of chosen one and name someone else subsequent to acquiring the earlier assent of such someone else in Form NO INC 3.
The company will , on the receipt of such suggestion , document with the registrar a notice of such change in Form.NO.INC.4 alongside expense as furnished in the Companies Rules,2014 and with the composed assent of the new chosen one in Form.No.INC.3 inside 30 days of receipt of hint of the change.
Death of sole member:
Where the sole member of One Person Company stops to be the part in case of death or inadequacy to contract and his nominee turns into the individual from such One Person Company, such new member will choose inside fifteen days of getting to be a member, a man who will in case of his passing or his insufficiency to contract turn into the member of such company, and the organization will record with the Registrar a suggestion of such end and assignment in Form No INC.4 alongside the charge as gave in the Companies (Registration workplaces and expenses) Rules, 2014 inside thirty days of the change in membership and with the earlier composed assent of the individual so named in Form No.INC.3.
Penalty:
In the event that One Person Company or any officer of such company negates the arrangements of these principles, One Person Company or any officer of the One Person Company will be culpable with fine which may reach out to ten thousand rupees and with a further fine which may stretch out to one thousand rupees for consistently after the first amid which such repudiation proceeds.
Characteristics of One person company:
Single Promoter
One person company is the only type of company which allows a single person to form, operate and have a complete control over the company with limited liability.
Owning Property
The company possess the right to own and enjoy its assets. The property owned can be tangible or intangible.
Easy Transferability
The procedure of transferring shares can be applied for transfer of ownership and thus making it very simple.
Borrowing Capacity
A One person company can avail easy funding from the banks and financial institutions. They can be provided loans with lower interests and without collateral security.
Requirements :
One shareholder and director is enough to start a company and another fact is that director and shareholder can be the same person and hence called as One person company.
Documents required for One Person Company registration:
- A copy of PAN card should be submitted by the person who starts the company(promoter) .
- A copy of ID card is has to be submitted. Driving license/voter ID/ passport/ Aadhaar card can be accepted for ID proof.
- Copy of utility bills should be produced as a proof of evidence. Documents such as telephone bill/electricity bill/water bill can be produced and it should have the address of the premise.
- Copy of passport-sized photographs.
- A copy of rental agreement should be produced.
- NOC from landlord should be submitted if it is a rented office.
- A copy of ownership document can be produced if it is an own property.
Conversion of One Person Company into a Private Limited Company or a Public Limited Company in certain cases:
Compulsory conversion of OPC:
- Where the paid up offer capital of an One Person Company surpasses fifty lakh rupees or its normal yearly turnover amid the important period surpasses two crore rupees, it will stop to be qualified for proceed as a One Person Company.
- “Relevant period” implies the time of instantly going before three back to back monetary years.
- Such One Person Company will be required to change over itself, inside a half year of the date on which its paid up offer capital is expanded past fifty lakh rupees or the most recent day of the pertinent period amid which its normal yearly turnover surpasses two crore rupees all things considered, into either a private limited company with least of two individuals and two directors or a public company with at any rate of seven individuals and three chiefs as per the arrangements of area 18 of the Act.
- The One Person Company will modify its update and articles by passing a goals as per sub-area (3) of segment 122 of the Act to offer impact to the transformation and to roll out important improvements coincidental thereto.
- The One Person Company will inside time of sixty days from the date of relevance of sub-rule (1), give a notice to the Registrar in Form No.INC.5 advising that it has stopped to be a One Person Company and that it is currently required to change over itself into a private company or a public company by excellence of its paid up offer capital or normal yearly turnover, having surpassed as far as possible set down in sub-rule (1).
- On the off chance that One Person Company or any officer of the One Person Company negates the arrangements of these guidelines, One Person Company or any officer of the One Person Company will be culpable with fine which may reach out to ten thousand rupees and with a further fine which may stretch out to one thousand rupees for consistently after the first amid which such contradiction proceeds.
Voluntary conversion of OPC:
- A One Person company can get itself changed over into a Private limited or Public limited company in the wake of expanding the base number of members and directors to two or least of seven members and a few directors all things considered, and by keeping up the base paid-up capital according to necessities of the Act for such class of company and by making due consistence of area 18 of the Act for transformation.
Conversion of private company into one person company:
- A private limited company other than a company registered under area 8 of the Act having paid up offer capital of fifty lakhs rupees or less or normal yearly turnover amid the significant period is two crore rupees or less may change over itself into one person company by passing an uncommon goals in the general gathering.
- Before passing such goals, the company will get No complaint in composing from members and creditors.
- The one person company will document duplicate of the unique goals with the Registrar of Companies inside thirty days from the date of passing such goals in Form No. MGT.14.
- The company will record an application in Form No.INC.6 for its transformation into One Person Company alongside expenses as gave in the Companies (Registration workplaces and charges) Rules, 2014, by joining the accompanying archives, to be specific:-
- The directors of the company will give a revelation by method for affirmation appropriately sworn in affirming that all members and creditors of the company have given their assent for conversion, the paid up offer capital company is fifty lakhs rupees or less or normal yearly turnover is under two crores rupees, by and large;
- The list of members and leasers;
- The most recent Audited Balance Sheet and the Profit and Loss Account; and
- The duplicate of No Objection letter of anchored creditors.
- On being fulfilled and followed prerequisites expressed in this the company registration officer will issue the Certificate.
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