Concept of One Person Company:
The concept of one Person Company in india is brought from the foreign countries. This is brought into india for the smooth running and to form a new legal entity by an individual. Before applicability of the companies act 2013, an individual legally can form only his sole proprietorship in india and no other option remain to him. Before the applicability of Companies act 2013, Individual had to search a reliable, genuine, and honest partner to form a private limited company.
Now, with the applicability of the companies act 2013, the requirement of two or more person is not required. Now a person who wishes to incorporate a private limited company can form individually without the involvement, share of any other individual. This is really a great concept introduced by the concept in the interest of the new entrepreneur who want to start the business by forming private limited company but could not do the same. Now ‘One Person Company’ can be formed.
Incorporation:
As per Section 2 (62) of the companies act 2013 ““One Person Company” means a company which has only one person as a member”
The following are some other features of the One Person company:-
1. One Person company (OPC) is exempted from the requirement of preparing Cash Flow Statement [Sec 2(40)]
2. The memorandum of One Person Company shall indicate the name of the other person who shall, in the event of the subscriber’s death/ incapacity to contract become the member of the company and the written consent of such person shall also be filed with the Registrar of Companies (form INC-3).
3. The words ‘‘One Person Company’’ shall be mentioned in brackets below the name of such company, wherever its name is printed, affixed or engraved [Sec 12(3)(d)]
4. An individual can incorporate maximum five number of ‘One Person Company’
Compliance requirement in ‘One Person Company’:
1. ‘One Person Company’ is required to file the copy of Financial statement within 180 days from the closure of the financial year [ Sec 137(1)]
2. ‘One Person Company’ is not required to hold the Annual General Meeting (AGM)
3. The provisions of section 98 and sections 100 to 111 (both inclusive) shall not apply to a ‘One Person Company’ [Sec (122)(1)]
4. In case of ‘One Person Company’ an individual being member shall be deemed to be its first director until the director or directors are duly appointed by the member.[Sec(152)(1)]
5. ‘One Person Company’ is required to hold any two Board meeting during a calendar year and one meeting in each half of the calendar year and gap between two meetings is not more than 90 days [Sec(173)(5)].
Forms for Incorporation of ‘One Person Company’:
1. Application for Reservation of Name- Form INC-1
2. Consent of Nominee – Form INC-3
3. Application for Incorporation- Form INC-2
4. Notice of Situation or change of Situation- Form INC-22
5. Appointment of Directors and key general Managerial person and changes – Form DIR -12
Conclusion:
This is the good step by the government which is brought from the foreign. If we see it by the view of income tax provisions, the ‘one person company’ is to be taxed with the higher rate as the other private limited companies and the dividend distribution tax under 2(22)(e) is also applicable on the ‘One person Company’. So to promote the new model of the company, government should give some tax benefits so that people attract to form the company under this new model called ‘One Person Company’.
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