Some Essential Information about One Person Company
Corporate laws in India were completely revolutionized by the 2013 Companies Act and several new concepts had been introduced that didn’t exist earlier. The introduction of the concept of One Person Company was one such innovation. This helped to start a business having lots of flexibility while also being protected by limited liability that is not present in a partnership or sole proprietorship.
How to define One Person Company
According to the 2013 Companies Act Section 2(62), a One Person Company is going to be a company consisting of only one person as the shareholder. Moreover, the company’s members are actually subscribers to its shareholders or its memorandum of association. Thus, it can be rightly asserted that One Person Company is actually a company having just one shareholder as a member.
These companies are usually established when there is just one promoter or founder for the company. In fact, a One Person Company will offer several advantages, and therefore businessmen who are just starting the business would like to create a One Person Company rather than a sole proprietorship business.
How to Build One Person Company in India
Below, we have mentioned the process of registering a One Person Company
1. Make an application for DSC
The initial step will be to obtain the DSC (digital signature certificate) of the proposed director that might need the subsequent documents:
• Address proof
• PAN card
• Email Id
• Aadhaar card
• Phone number
• Photo
2. Make an application for DIN
Once creating the digital signature certificate has become complete, the subsequent step would be to make an application for the DIN (Director Identification Number) of the Director in SPICe Form, together with the address proof and name of the director. The only option available for existing businesses is the Form DIR-3. It implies that there is no need for the applicant to file Form DIR-3 separately with effect from the month of January 2018. It will not be possible to apply DIN within the form for as many as 3 directors.
3. Application for name approval
Making a decision on the company’s name will be the subsequent step while registering a One Person Company. The company’s name is going to be in the form of “ABC Private Limited” where ABC will be about One Person Company name.
It will be possible to approve the name in the Form SPICe+ 32 application. Just one name, together with the importance of keeping that particular name can be provided in the Form SPICe+ 32 application. You can submit another name if that particular name is not accepted, and this can be done by making an application for one more Form SPICe+ 32 application.
Go to the subsequent step after this name has been sanctioned by the MCA.
4. Required documents
The subsequent documents have to be prepared for submitting to the ROC:
• The AoA (Articles of the Association).
• The MoA (Memorandum of Association).
• Proof of the proposed company’s Registered Office together with a NOC as well as the proof of ownership from the owner.
• Consent of the proposed Director of DIR – 2 and INC – 9 respectively.
• A statement made by the professional confirming that every single compliance has been made.
5. Filing of forms with MCA
It is essential to attach all these documents to the SPICe Form, SPICe-AOA, and SPICe-MOA together with the DSC of the professional as well as the Director, and these are going to be uploaded to the MCA website for becoming approved. The TAN and the PAN number will be generated at the time of the registration of the Company automatically. No separate applications have to be filed for getting TAN and PAN numbers.
6. Issuing the Certificate of Incorporation
After verification, a Certificate of Incorporation will be issued by the ROC (Registrar of Companies) so that the business can be started.
Laws and rules
• Minimum and maximum of only a single member.
• It is imperative to appoint a nominee prior to incorporation.
• It is essential to get the consent of the nominee in Form INC-3.
• Minimum authorized capital of 1 lakh INR.
• One has to select the name of the One Person Company according to the provisions of the Companies 2014.
• Proof of the OPC’s registered office.
Benefits of One Person Company
1. Obtaining funds will be simpler
One Person Company happens to be a private company, and therefore, it will be simpler to go for fundraising via angel investors, venture capitals, incubators, and so on. Financial institutions and banks like to provide loans to a company instead of a proprietorship firm. Therefore, it becomes quite simple to get funds.
2. Succession
The Companies Act likewise provides for an individual that a stakeholder nominates, to take control of the company in case the said stakeholder is not able to do so or has died. Apart from this, it will also enable the One Person Company to have a longer life even beyond that of the founding director.
3. Simple incorporation
Only one member plus one nominee will be needed for incorporating an OPC and therefore, it is quite easy to incorporate the company. The member might also be the director. Also, the minimum endorsed capital happens to be just 1 lakh INR for incorporating the OPC.
4. Fewer compliances
Certain exemptions are provided by the 2013 Companies Act to the One Person Company when it comes to compliances. There is no need for the OPC to prepare the statement of cash flow. There is no need for the company secretary to sign annual returns and books of accounts as well; it is the director who has to sign all these.
How MyRegistration Company will help to build One Person Company
MyRegistration Company comprises devoted legal advisors at your nearest location, and it is known to provide an affordable One person Company registration service in the country. Our company will look after the legal formalities while satisfying the compliances as well. You will be obtaining a COL (Certificate of Incorporation) together with TAN as well as PAN. Now, it will be feasible for you to open an account in the bank for commencing your business operations.
