{"id":278,"date":"2019-07-13T07:51:23","date_gmt":"2019-07-13T07:51:23","guid":{"rendered":"https:\/\/www.smartcorp.in\/blog\/?p=278"},"modified":"2019-07-13T08:46:15","modified_gmt":"2019-07-13T08:46:15","slug":"incorporating-features-one-person-company-world","status":"publish","type":"post","link":"https:\/\/www.smartcorp.in\/blog\/incorporating-features-one-person-company-world\/","title":{"rendered":"Incorporating features of One Person Company across the world"},"content":{"rendered":"\n

In this blog, we have discussed about the incorporating features of one person companies<\/a> and their advantages in world-wide.One person companies are not provided under the companies Act, 1956. It was introduced by the Companies Act, 2013. One Person Company, the name itself suggest that it should contain only one member. Moreover, an OPC is a vehicle that seeks remedies to solve problems faced by companies such as Sole proprietorship. It has the unlimited liability and able to balance the extensive requirements of incorporating and running business. Therefore, one person companies will be best choice of business for the person who wish to start a business venture with the structural and organizational advantages.<\/p>\n\n\n\n

\"Incorporating<\/figure><\/div>\n\n\n\n

Moreover, an one person company<\/a> is a vehicle that seeks remedies to solve problems faced by companies such as Sole proprietorship. It has the unlimited liability and able to balance the extensive requirements of incorporating and running business. Therefore, one person companies will be best choice of business for the person who wish to start a business venture with the structural and organizational advantages.<\/p>\n\n\n\n

Incorporating an OPC:<\/h3>\n\n\n\n

Several countries have already recognized the ability of individuals incorporating a company before the enactment of the new Companies Act in 2013. Furthermore, members of a companies are nothing but subscribers to its memorandum of association (MOA), or its shareholders. Therefore, OPC<\/em> is a company that has only one shareholder as its member. Such companies are generally created when there is only one founder or promoter for the business. Entrepreneurs whose businesses lies in early stages can start OPCs instead of sole proprietorship business because they provide several advantages.<\/p>\n\n\n\n

Incorporating History of OPC:<\/h2>\n\n\n\n

The concept of one person company<\/a> was first recommended by the experts committee of Dr. JJ Irani in 2005. Chiefly, the committee decided to classify the companies based on size, members and the control. In reference to the OPC<\/em>, it is said that \u201cit is the time that entrepreneurial capabilities of the people are given an outlet for the participation in the economical activates\u201d. <\/p>\n\n\n\n

\"Incorporating<\/figure><\/div>\n\n\n\n

Moreover, it is also recommended that a simpler rule through exemptions be made applicable to OPCs <\/em>in order that an entrepreneur is not required to expend excessive time and resources on procedure that could otherwise be applied to its business activities. <\/p>\n\n\n\n

Consequently, major counterparts of Indian OPCs are found in Europe, United States and Australia have resulted in strengthening the economies of the countries. Similarly, OPC will give businessmen all the benefits that a private business will give. OPCs provides the opportunity to people to take advantage of the unique characteristics of a company while remaining independent.<\/p>\n\n\n\n

Reason for the formation:<\/h3>\n\n\n\n

Under the old companies act, there was a requirement of at least two people to form a private limited companies. Hence, this is considered to be the major difficulty for those business people who wish to start the business alone. The only option will be going for a private limited companies or public limited companies with seven members.<\/p>\n\n\n\n

Specifically, The reason why a private limited company necessarily have at least two people is to differentiate it from a sole proprietorship,<\/a> which any individual could start on his own consensus.Incorporating features may vary from one company to other,<\/p>\n\n\n\n

Idea of an OPC:<\/h4>\n\n\n\n

To over this problem, the companies are incorporating by individuals on appointing directors. They were given only one share, which is mandatory to become the member of the companies. The rest of the shares are retained by the owner of the company. In other words, the idea of one person company <\/a> was introduced for the first time in the year 2009, but unfortunately, the idea could not cope up itself into something concrete. Then again in 2012, efforts were made to implement the idea, and it became a reality with the introduction of the Companies Act, 2013.<\/p>\n\n\n\n

Features of a One Person Company<\/h3>\n\n\n\n
\"Incorporating<\/figure><\/div>\n\n\n\n

Some of the general features of a\none-person company:<\/p>\n\n\n\n

Private company: <\/h4>\n\n\n\n

Section 3(1)(c) of the Companies\nAct says that a single person can form a company for any lawful purpose. It\nfurther describes OPC<\/em>s as private\ncompanies.<\/p>\n\n\n\n

Single member: <\/h4>\n\n\n\n

Moreover, One person companies<\/a> should have only one member or shareholder, unlike other private companies.<\/p>\n\n\n\n

Nominee: <\/h4>\n\n\n\n

A unique feature of OPC<\/em>s that separates it from other kinds\nof companies is that the sole member of the company has to mention a nominee\nwhile registering the company.<\/p>\n\n\n\n

No perpetual succession: <\/h5>\n\n\n\n

Since there is only one member in an OPC<\/em>, his death will result in the nominee choosing or rejecting to become its sole member. This does not happen in other companies as they follow the concept of perpetual succession.<\/p>\n\n\n\n

Minimum one director: <\/h5>\n\n\n\n

In essence, OPCs need to have minimum one person (the member) as director. They can have a maximum of 15 directors.<\/p>\n\n\n\n

No minimum paid-up share capital:\n<\/h5>\n\n\n\n

Companies Act<\/a>, 2013 has not prescribed any amount as minimum paid-up capital for OPCs.<\/p>\n\n\n\n

Special privileges: <\/h5>\n\n\n\n

OPC<\/em>s enjoys privileges and exemptions under the Companies Act compared\nto other companies.<\/p>\n\n\n\n

Who can form a one person\ncompany?<\/h3>\n\n\n\n

In addition, Only a \u2018natural person\u2019 who is an Indian citizen and resident in India, i.e., a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one calendar year can incorporate a One Person Company and a nominee for the sole member of a One Person Company.<\/a><\/p>\n\n\n\n

AS PER ONE PERSON COMPANY (RULE 3\nOF COMPANIES (INCORPORATION) RULES, 2014)<\/h5>\n\n\n\n