The One Person Company principle was introduced in 2013 by the Companies Act. The organization was started to support entrepreneurs to start their own businesses and to support the single person.
An individual may have only one member in the organization, while at least two members are required to co-operate and maintain a private limited company or limited liability partnership.
An individual company is a company with individual laws. Limited liability protection is provided to its sole shareholder.
Who can start a one-person company? Anyone residing in India or having Indian citizenship can start a one person company. A person is required to appoint an appointed director to incorporate the company.
Process for registering a person company: 1.The proposed director needs a digital signature and director identification number. 2. The name can be applied for approval by paying a fee to the Ministry of Corporate Affairs. 3. Once the name is approved, submit the attachment documents such as MOA and AOA to the Ministry of Corporate Affairs. 4. After the Registrar of Companies, ROC approves your application, you will need to obtain a digitally signed certificate attached in your person’s name. 5. Apply for required records related to tax (TAN / PAN). Open a current bank account with any bank.
Benefits of one person company: 1. An individual can start a corporate company without meeting the needs of the partner. 2. Can operate as a permanent company. Can be legally easily closed if needed. Or you can even easily transfer ownership. 3. Can easily avail loan assistance from financial institutions and banks. 4. A person can buy and own property in the company, in his own name.
One person company contract: If a person enters into an agreement through company shares or with a sole member of the company in which the shareholder is the director of the company, the terms of the contract or opportunity will be recorded in the minutes of the first meeting of the board of directors of the subsequent company, even after the contract or opportunity has been entered into. This does not apply to being contracted by the company in the normal course of its business. Each approval approved by the Company and the first meeting minutes recorded at the meeting held by its Board of Directors shall be forwarded to the Registrar for approval within each subsequent fortnight.
Terms and conditions of an individual company 1. A person is not eligible to join more than one single company or to be a designated director in more than one company. 2. A person cannot be a minor as a member or shareholder of a company. 3. An individual entity cannot be incorporated or transferred into a entity under Section 8 of the Act. 4. It may not carry out non-bank financial investment activities, including investing in the securities of any corporate entity. 5. An individual can be converted into a company after 2 years from the date of commencement of the company. Either its nominal share capital should be more than Rs 50 lakh, or the company should have an annual turnover of more than Rs 2 crore over a period of time. That is, if the loan capital of the company exceeds Rs. 50 lakhs or the annual income of the company exceeds Rs. 2 crores, one person can convert the company into a private or public company.