Introduction to One Person Company
One person Company
One person company, is a company which has only one person as a member;
Companies Act, 2013: Section 2(62)
Section 2(62) of the 2013 Act was notified vide SO 902(E) and has been in effect from 01-04-2014. One person company is a new concept introduced for the first time, in India, in the 2013 Act. As per this definition there will be only one member in the one person company. Only a natural person can be a member in a one person company. One person company is a recognized form of business entity in many other countries too.
This is a new definition and is based on the recommendation of the J.J. Irani Committee. The J.J. Irani Committee indicated the ctiteria for classification of companies but the Committee recognized that such classification can never be exhaustive. On the basis of number of members the classification can be as a) One person company b) Private companies c) Public companies
The Committee in its report stated that:-
“The law should recognize the potential for diversity in the forms of companies and rather than seeking to regulate specific aspects of each form, seek to provide for principles that enable economic inter-action for wealth creation on the basis of clear and widely accepted principles”.
“With increasing use of information technology and computers, emergence of the service sector, it is time that the entrepreneurial capabilities of the people are given an outlet for participation in economic activity Such economic activity may take place through the creation of an economic person in the form of a company. Yet it would not be reasonable to expect that every entrepreneur who is capable of developing his ideas and participating in the market place should do it through an association of persons. We feel that it is possible for individuals to operate in the economic domain and contribute effectively. To facilitate this, the Committee recommends that the law should recognize the formation of a single person economic entity in the form of ‘One Person Company’. Such an entity may be provided with a simpler regime through exemptions so that the single entrepreneur is not compelled to fritter away his time, energy and resources on procedural matters.
The concept of ‘One Person Company’ may be introduced in the Act with following characteristics
(a) OPC may be registered as a private Company with one member and may also have at least one director;
(b)Adequate safeguards in case of death/disability of the sole person should be provided through appointment of another individual as Nominee Director. On the demise of the original director, the nominee director will manage the affairs of the company till the date of transmission of shares to legal heirs of the premises member.
(c) Letters ‘OPC’ to be suffixed with the name of One Person Companies to distinguish it from other companies”. For One Person Company Registration in Coimbatore, kindly visit our site and feel free to contact us. Thanks for reading…..