Finally, New companies act 2013 has provision for incorporation of "One Person Company". This was need of hour and finally Indian Government has given its assent to it.
One Person Company is a new vehicle/form of business, enabling Entrepreneurs carrying on the business as Sole-Proprietor to enter into a Corporate Framework.
Such companies have only one member it enjoys certain privileges / relaxations / exemptions compared to other companies. Though the concept of One Person Company is new in India but it is a very successful form of business in UK and several European countries since a very long time now.
One Person Company will give the young businessman all benefits of a private limited company which categorically means they will have access to credits, bank loans, limited liability, legal protection for business, access to market etc all in the name of a separate legal entity.
Section 3 of the New Companies Act, 2013 provides for the incorporation of One Person Company.
This Company shall be a private Limited Company.
The Company can have one or two Directors, who can be different from the promoter. The promoter can also act as a sole Director of the Company.
It is required for One Person Company to also indicate the name of other person in Memorandum who shall act in case of death or incapacity of one person.
Only a natural person who is an Indian citizen and resident in India (as defined) shall be eligible to incorporate a One Person Company and also shall be a nominee for the sole member of a One Person Company.
One Person Company cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporate.
It will be necessary to mention "one person company" wherever the name is printed or affixed.
One Person Company cannot be converted voluntarily into any kind of company unless two years have expired from the date of incorporation, except threshold limit (paid up share capital) is increased beyond fifty lakh rupees or its average annual turnover during the relevant period exceeds two crore rupees.
There are various forms to be filed for details of Nominee members, Application for reserving the name of the Company, the details of Incorporation needs, the affidavit, Signature to be etc.
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