Formation of One Person Company Registration in Coimbatore
One person company is a brand new milestone within the Indian corporate criminal world which has its very own execs and cons. The advent of the new Companies Act in 2013 has been the most sizeable reform in business enterprise law in India which allowed for diverse changes and a more revolutionary and liberal approach to do enterprise in India. The revolutionary idea of One Person Company (OPC) formation turned into first brought in India via the Companies Act, 2013.
The purpose of incorporating this concept is to sell entrepreneurship. This will help marketers access positive facilities, such as bank loans, through allowing them to input the market as a separate entity and as a criminal protect for their commercial enterprise. The regulation gave one individual the freedom to make a contribution to the economic sports of India.
Section 2(62) of the Companies Act, 2013 defines a one person company as “a enterprise with most effective one individual as a member”, in which all legal and monetary duties are restrained to society and now not to its members. Only native-born Indians living in India (that is, having stayed at least 182 days inside the previous monetary year) may additionally represent One Person.
This idea of one person company is just like the existing idea of the person enterprise. However, the character enterprise ills that the homeowners typically faced have been removed by means of this concept. The important feature of One Person Company registration in Coimbatore is that the mitigated dangers are confined to the importance of the cost of the stocks held via that character inside the corporation. This will help entrepreneurs to take the threat of doing commercial enterprise without issue to personal property disputes and liabilities.
The concept of “one person company” (OPC) particularly has the following characteristics: –
• A one person company (OPC) registration in Chennai may be registered as a private company with a member and may additionally have as a minimum one director.
• Adequate guarantees within the occasion of the dying/incapacity of the sole character must be provided by the appointment of another character because the nominated Director. In the occasion of the dying of the first director, the designated director will employ the affairs of the corporation until the date of switch of the stocks to the legal heirs of the deceased member.
• The letters “OPC” ought to be supplemented by the name “One Person Company” to differentiate it from different companies.
Section 3(1) (c) of the Companies Act offers for the incorporation of the One Person Company. It in addition includes under its ambit that the agency should have been shaped for a lawful purpose, by means of one character. In addition to this, the members of the employer are required to submit their names to the memorandum of the agency, which would encompass the call of one other individual and this need to be executed with the earlier consent of that character within the written form. The significance of the presence of 1 different individual inside the One Person Company registration in Bangalore is that such someone would turn out to be the performing member of that enterprise inside the occasion of the incapacity or death of the subscriber of the organisation.
Such someone’s consent is needed to receive in writing and there may be a further prerequisite of the consent to be filed with the registrar at the time of the incorporation of the corporation and this have to be finished along with the articles of association and the memorandum. When it comes to withdrawal of the consent of such a person, the equal can be achieved thru a way prescribed by means of the said section under the Companies Act.
To apprehend a “one person company”, now called OPC, it becomes crucial to first analyze what a enterprise is. The phrase has no strict technical or criminal meaning. Under the Companies Act 2013, a “business enterprise” means a organization incorporated below this Act or any other Companies act.
The reason of incorporating this concept is to promote entrepreneurship. This will help entrepreneurs access sure facilities, such as bank loans, by using letting them input the market as a separate entity and as a legal protect for their commercial enterprise. The law gave one person the freedom to make a contribution to the economic sports of India. This article attempts to provide the broad outline of the brand new progressive corporate concept to someone as presented with the aid of the Companies Act 2013.
At the heart of this article, the author attempts to convey
• The basic concept of the one person company.
• The want to emerge from the concept.
• To appreciate the advantages and spotlight the disadvantages and shortcomings of the concept.
When the idea of non-public law was read in accordance with the provisions referring to the incorporation of a company, the question become whether a single character could, in the exercising of his personal rights, constitute a agency. That is, the individual right of a person to establish a trade, a commercial enterprise or a alternate might be confined with the aid of the provisions of company law which obligate at least participants to create a employer.
A one person company registration in Hyderabad is described in sub-section 62 of section 2 of the Act. It defines a organisation as “a enterprise with simplest one character as a member”, in which all criminal and monetary obligations are restricted to society and no longer to its members. Only native-born Indians residing in India (that is, having stayed at the least 182 days in the preceding financial year) may represent One Person.
This concept of one person company formation is just like the existing idea of the person enterprise. However, the man or woman commercial enterprise ills that the homeowners usually faced have been removed by using this idea. The crucial feature of One Person Company formation is that the mitigated dangers are limited to the magnitude of the value of the shares held by that individual in the organization. This will help marketers to take the threat of doing commercial enterprise without predicament to personal property disputes and liabilities.
The concept of “one person company” (OPC) formation can be introduced into law with the following characteristics: –
• A one person company (OPC) formation may be registered as a private corporation with a member and may also have at least one director.
• Adequate guarantees in the event of the death/disability of the sole person should be provided by the appointment of another person as the nominated Director. In the event of the death of the first director, the designated director will appoint the affairs of the corporation until the date of transfer of the shares to the legal heirs of the deceased member.
• The letters “OPC” must be supplemented by the name “One Person Companies” to distinguish it from other companies.
Reasons for the formation
Under the old Companies Act, 1956, at least two members were required for the formation of a limited liability company. It was an obstacle for entrepreneurs who wanted to go solo.
According to the old law, the only options were either to create a private company of at least two members or a public company of at least seven members, which was either limited in shares, guaranteed or unlimited. The parliamentarians invoked at least two members for a private company, to differentiate it from that of an individual company that could be launched by an individual.
But people started to create companies by adding a nominal member/director and assigning them only one share, the prerequisite for being a director, and keeping the rest with themselves. It was a way of circumventing the law to comply with legal requirements while exercising a dominant position.
This has been considered by the legislature as a fraudulent activity. Although constituted in accordance with legal provisions, it seeks to violate the very reason for which such a restriction has been imposed. That is to say that section 12 of the Companies Act of 1956 sought to remedy the wrong sought because it guarantees that an enterprise would not be left under the sole control of an individual, but would be shared by at least two individuals. But this intention of the legislature was defeated by incorporating private corporations to a nominal member.
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