Overview of One Person Company Registration in Coimbatore
One Person Company
The Companies Act, 2013 completely revolutionized corporate laws in India by introducing numerous new standards that did not exist previously. On such game-changer was the creation of One Person Company concept. This overview led to the popularity of a totally new manner of starting groups that accorded flexibility which a employer shape of entity can offer, whilst also imparting the safety of restricted legal responsibility that sole proprietorship or partnerships lacked.
Several other international locations had already recognized the ability of individuals forming a corporation earlier than the enactment of the new Companies Act in 2013. These protected the likes of China, Singapore, UK, Australia, and the USA.
Definition of One Person Company
Section 2(62) of Companies Act defines a one person company as a employer that has most effective one character as to its member. Furthermore, members of a corporation are nothing but subscribers to its memorandum of association, or its shareholders. So, an OPC is efficiently a enterprise that has simplest one shareholder as its member.
Such companies are normally created when there is simplest one founder/promoter for the business. Entrepreneurs whose companies where in early stages choose to create One person companies in stead of sole proprietorship firm due to the several overview that OPCs offer.
Difference among OPCs and Sole Proprietorships
A sole proprietorship shape of enterprise might seem very just like one person companies because they both involve a single character proudly owning the enterprise, but they’re truely exist a few differences between them.
The important distinction between these two is the nature of the liabilities they carry. Since an OPC is a separate legal entity outstanding from its promoter, it has its own property and liabilities. The promoter isn’t always personally overview to repay the debts of the company.
On the opposite hand, sole proprietorships and their proprietors are the identical humans. So, the regulation allows attachment and sale of promoter’s own belongings in case of non-fulfilment of the business’ liabilities.
Overview of a One Person Company
Here are some preferred features of a one person companies:
a. Private company: Section 3(1)(c) of the Companies Act says that a single character can form a company for any lawful purpose. It in addition describes One person companies as private agencies.
B. Single-member: OPCs could have most effective one member or shareholder, not like different private companies.
C. Nominee: A unique characteristic of OPCs that separates it from other kinds of companies is that the sole member of the enterprise has to say a nominee whilst registering the company.
D. No perpetual succession: Since there is most effective one member in an OPC, his loss of life will result in the nominee deciding on or rejecting to grow to be its sole member. This does now not manifest in different organizations as they observe the idea of perpetual succession.
E. Minimum one director: OPCs want to have minimal one person (the member) as director. They can have a most of 15 administrators.
F. No minimal paid-up percentage capital: Companies Act, 2013 has no longer prescribed any quantity as minimal paid-up capital for OPCs.
G. Special privileges: OPCs overview in numerous privileges and exemptions underneath the Companies Act that other types of organizations do now not possess.
Formation of One Person Companies
A single person can form an OPC by using subscribing his name to the memorandum of association and enjoyable different requirements prescribed via the Companies Act, 2013. Such memorandum must state info of a nominee who shall emerge as the enterprise’s sole member in case the original member dies or turns into incapable of moving into contractual relations.
This memorandum and the nominee’s consent to his nomination should be filed to the Registrar of Companies in conjunction with an application of one person company registration. Such nominee can withdraw his name at any factor in time through submission of needful applications to the Registrar. His nomination also can later be canceled with the aid of the member.
Membership in One Person Companies
Only natural persons who are Indian residents and citizens are eligible to form a one person company in India. The identical situation applies to nominees of OPCs. Further, this sort of natural man or woman can not be a member or nominee of a couple of OPC at any factor in time.
It is important to be aware that handiest natural persons can come to be individuals of OPCs. This does not happen inside the case of groups wherein corporations themselves can own shares and be participants. Further, the law prohibits minors from being individuals or nominees of One person companies.
Conversion of OPCs into different Companies
Rules regulating the formation of one-character organizations expressly restriction the conversion of OPCs into Section 8 company, i.e. corporations that have charitable objectives. OPCs also can’t voluntarily convert into different types of companies until the expiry of two years from the date in their incorporation.
Privileges of One Person Companies
One person company experience the subsequent privileges and exemptions underneath the Companies Act:
• They do no longer have to maintain annual preferred conferences.
• Their monetary statements need now not consist of coins float statements.
• A company secretary isn’t always required to sign annual returns; administrators also can do so.
• Provisions relating to unbiased directors do not practice to them.
• Their articles can overview for extra grounds for vacation of a director’s office.
• Several provisions referring to conferences and quorum do now not follow to them.
• They can pay greater remuneration to administrators than as compared to different groups.
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