Definition
- One Person Company is defined under Section 2 of the Companies Act, 2013, which means when a Company has only one person as a member.
- Although, it might have more than one Director no member can be included other than one member at a time as it will lose its sanctity of One Person Company.
- One Person Company is incorporated with individual founder or promoter for the business in accordance with the provisions of Companies Act, 2017.
Advantage of One Person Company
- The One Person Company has several advantages such as
- It gives complete control of the Company in the hand of a single-owner only.
- It provides legal and Social identity for your Business
- It has limited liability
- One Person Company has its independent existence
- It reduces the compliance burden
- It also has a feature of perpetual succession for raising the capital for the business.
- It is easy to get financial assistance from banks and other financial institutions.
- It increases the trust of customers and clients.
- One Person Company can be converted into a Private or Public Company after fulfilling some eligibility requirements.
Essential documents required for the registration of One Person Company
- The following documents are required for registering as a One Person Company such as
- Self Attested Address proof of the Member or Director
- Self Attested Identity proof of the Member or Director
- Self Attested Aadhaar Card of the Member or Director
- Self Attested PAN Card of the Member or Director
- Self Attested photo of the Member or Director
- Contact Number and E-mail ID of the Member of Director
- The proof of place of the registered office of the Company, ownership proof, and owner shall also provide No Objection Certificate (NOC).
Criteria for registration
- For the registration of the One Person Company, the following criteria shall be fulfilled:
- Approval of the name of the Member or Director
- Collection of the required documents as per the Companies Act, 2013.
- Uploading and filing for incorporation with the essential documents uploaded on the Ministry of Corporate Affairs portal.
- Certificate of Incorporation issued by the Registrar of Companies.
Time taken in registration
Generally, for the registration of One Person Company in India, it takes 7-10 days after the successful submission of documents as the Government has always supported in incorporating a Company.
Fee structure
The fee imposed on the incorporation of the Company is totally based on the authorized capital of proposed Company. Hence it depends upon the different case.
Disadvantages of One Person Company
- There is some disadvantage of One Person Company that is:
- It is generally suitable for small businesses which are having a paid-up capital of a minimum of Rs 50 Lakh or having a turnover of Rs 2 crores.
- Applicability of High Tax Rate
- One Person Company cannot be incorporated under section 8 of the Act.