ONE PERSON COMPANY
BY SUSHMA GOWDA
INTRODUCTION OF ONE PERSON COMPANY
The Concept of One person company was introduced by Dr. Jamshed J. Irani on Company Law dated 31st May 2005. One person company can be formed either as a company limited by share, Company Limited by guarantee or an unlimited company.
As person Section 2(62) of the companies act 2013, One person company means the company formed by the one person.
One person company compulsorily should get convert into Private Limited Company when Paid-up share capital exceeds rupees 50 lakhs or Turnover Crosses Rs. 2 crore
FORMATION
To Incorporate One person Company authorised share capital should be minimum of 100000rs. Business involved in financial activities cannot be incorporated as one person company.In the case of One person company there shall be minimum one member and one director in the case of section 2(62) of companies act 2013. One person Company is a Separate legal entity from its promoter.
As per section 3(1)(c ) one person company to be formed should be of private company. In other words one person company is the kind of Private Company.
As per Section 3(2) Company can be formed as Company limited by shares, Company limited by Guarantee or an Unlimited Liability Company.
One person company is exempt from holding an Annual General meeting or Extraordinary General meeting. In case of One person company cash flow statement is not required.
RULE 3 OF COMPANIES (INCORPORATION) RULES, 2014- ONE PERSON COMPANY.
Only a natural person who is Indian citizen and resident in India is eligible to incorporate One Person Company and they can be nominee of such Company.
Minor cannot become the member of the one person company they will be considered as Disqualified from the eye of law.
One person company must be converted into Private Limited Company If it crosses an Annual turnover crosses 2 crores.
One Person Company cannot be converted into Section 8 of companies act 2013, it cannot Non-banking Financing activities including Investment in Securities of any Body Corporate.
NOMINEE
Person cannot become nominee or incorporate more than one person company. If a natural person is being the member of one person of Company in accordance with the laws and rule becomes member of another company by virtue of being nominee of such one person company, but to avail such benefit they should comply with all the rules (2) within period of 180 days.
If Nominee entitled to withdraw than notice of withdrawal shall be given within the period of 15 days. Nomination of new Personnel but be informed to company through written consent in FORM INC-3, and in case of new nominee with registrar in FORM INC-4 to MCA.
Change of nominee should take place within 30 days from the date of intimation.
PENALTY
If a one person company or an officer of such company not comply with the rules and regulation or Contravenes it then they are punishable with the fine of 10000rs which may get increased up to 1000rs every day if they continue to do it.
