One Person Company Registration

ONE PERSON COMPANY- BLESSING OR CURSE?

 One Person Company- Introduction

A One person company is a unique form of Company, where it has the benefits of Sole Proprietorship and Company. It can be formed with one person as the Director and Member and another person as Nominee for the Member/Director.

OPC allows a single person to run a company with limited liability, in case of a sole proprietorship, even though it is run and owned by one individual there is no distinction between the owner and the business as in the case of OPC and the liability is unlimited.

Why Register OPC?

Time and again general public are more impressed by an incorporated company whose name ends with PVT LTD or LTD than a simple business name without any registration. Also, an unregistered business has more threats from the competitors as they may use your firm name with slight modification to confuse your customers. In order to avoid these chaos, you can go for an OPC registration which secures your company brand name.

Small and medium enterprises, doing business as sole proprietors, might easily enter into the corporate domain through this OPC registration.

OPC has perpetual succession; the nominee shall in the event of death of the member become a member of the company and will be responsible for the running of the company.

How to start a One Person Company?

An OPC is registered as a private limited company, OPC restrict to have more than one member and prohibits invitation to the public for subscription of the shares of the company.

Steps to Start an One Person Company:

1. Obtain Digital Signature Certificate [DSC] for the proposed Director.

2. Obtain Director Identification Number [DIN] for the proposed director.

3. Select suitable Company Name, and make an application to the Ministry of Corporate Office for availability of name. 

4. Sign and file various documents including MOA & AOA with the Registrar of Companies electronically. 

5. Receipt of Certificate of Registration/Incorporation from ROC.

To conclude it is very clear that One Person company is sure a blessings for the Sole Proprietors who now can enter into Corporate form of Business and can enjoy the benefits of a Private Company.

Private Limited Company Registration

Starting a Private Limited Company in India.

MINIMUM REQUIREMENT:

1. Should be formed by two or more persons.

2. No Minimum capital is required.

3. DSC for both the Directors of the Company.

4. DIN -Director Identification Number for both the Directors.

*The Directors and shareholders can be the same person.

What is a Digital Signature Certificate (DSC)?

The Information Technology Act, 2000 provides for use of Digital Signatures on the documents submitted in electronic form in order to ensure the security and authenticity of the documents filed electronically. This is the only secure and authentic way that a document can be submitted electronically. As such, all filings done by the companies under MCA21 e-Governance programme are required to be filed with the use of Digital Signatures by the person authorised to sign the documents.

Getting DIN

The concept of a Director Identification Number (DIN) has been introduced for the first time with the insertion of Sections 266A to 266G of Companies (Amendment) Act, 2006. As such, all the existing and intending Directors have to obtain DIN within the prescribed time-frame as notified.

Name Search and Application for Name Reservation:

The first step in the formation of a company is the approval of the name by the Registrar of Companies (ROC) in the State/Union Territory in which the company will maintain its Registered Office. This approval is provided subject to certain conditions: for instance 

There should not be an existing company by the same name. The last words in the name are required to be "Private Ltd." The application should mention at least four suitable names of the proposed company, in order of preference. Once a name is approved, it is valid for a period of sixty days, within which time Memorandum of Association and Articles of Association together with miscellaneous documents should be filed.  Registration Process: Submission of Final documents to the Registrar of Companies: After getting the name approved from the Registrar of Companies (RoC), documents such as MOA, AOA and other miscellaneous documents has to be submitted within 60 days from the date of approval of name. The ROC will issue a Certificate of Incorporation after careful review of documents submitted. Section 34(1) cast an obligation on the Registrar to issue a Certificate of Incorporation, normally within 7 days of the receipt of documents.  As per the new Companies Act, 2013, even the Private Limited Companies has to apply for Certificate of Commencement of Business after obtaining Certificate of Incorporation.

Trademark Registration in India

SECURE YOUR BRAND BY APPLYING TRADEMARK

What is Trademark?

A trade mark is a sign that you can use to distinguish your business’ goods or services from those of other traders.

A trade mark can be represented graphically in the form of your company’s logo or a signature.

Through a registered trade mark, you can protect your brand (or “mark”) by restricting other people from using its name or logo.

It is not compulsory to Register a Trademark in India, but For a mark that is not registered, you may rely on your rights under the common law action of "passing off" to protect your mark against imitation or infringement.

How to apply for a Trademark?

A trademark application has to be filed before the Registrar of Trade Marks. It should be filed at the office of the Trade Marks Registry corresponding to the principal place of business of the applicant. While applying for the Trade Mark Registration, the proprietor has to define the class under which he wants his product / service to be classified. Finally, once the work is done, you need to pay the fees associated with the Trademark. Today, as per the Trademark Rules, 2002, the application fees are Rs. 4000/- per trademark.

What happens after applying for TM?

After making necessary TM application, you can use the word TM above your LOGO. Usually you would get an Registered Trademark after 2 years of time. Once making the application, you can use your logo for advertising.

A trade mark can add value to your business because it can be used to protect your market share, you can license it to third parties such as a franchisee, or you can sell it outright for a specified value.

Start a Company - Company Registration India

Incorporation of Limited liability Partnership (LLP)

Introduction:

A Limited Liability Partnership (LLP) combines the advantages of both the Company and Partnership into a single form of organization. In an LLP, one partner is not responsible or liable for another partner's misconduct or negligence. In an LLP, all partners have a form of limited liability for each individual's protection within the partnership, similar to that of the shareholders of a corporation.

Features of LLP :

·         The LLP has a separate single entity.

·         Minimum two partners are required.

·         No requirement for minimum capital contribution.

·         The mutual rights and duties of LLP and its partners shall be governed by LLP             agreement between the partners or between LLP and its partners.

·         Provision for Firms/ Private Limited Companies/ Unlisted Companies to convert into LLPs.

Steps to Incorporate a Limited liability Partnership(LLP):

1. Obtain Directors Identification Number (DIN):

Minimum two designated partner is required to Incorporate LLP and they are required to apply for DIN in order to become a partner in LLP. DIN is a unique number being allotted to every partner in a LLP.

2. Register Digital Signature Certificate (DSC):

Class II digital signature of all the designated partners is required. The digital signature is a mandatory requirement for filing online documents with the Registrar of Companies (ROC).

3. File Form 1 for name approval:

After completing the above mentioned criteria one needs to file Form 1 for getting approval of name for the proposed LLP. For this four names (in order of preference) which the partners propose to keep for the LLP is required to be filled. After getting approval of name, draft the LLP agreement through which mutual rights of partners are governed and it needs to be filed along with other forms.

4. File Form 2 for Incorporation document & Subscriber’s Statement:

After getting name approval, Form 2 for incorporation should be filed along with the Registered Office Address Proof.

5. File Form 3 for LLP agreement:

After Form 2 has been filed, Form 3 is to be filed within 30 days along with the LLP agreement from the date of registration.

6. File form 4 to provide details about designated partners:

Form 4 is required to be filed for providing complete information regarding appointment, cessation or changes made if any in respect of the Designated Partners.

7. Receipt of Certificate of Incorporation from ROC:

Once all aforesaid formalities have been completed, ROC shall issue the certificate of incorporation to the LLP. Once the certificate of incorporation has been issued by ROC, the LLP is geared up for functioning.

Conclusion:

The passing of the Limited Liability Partnership Act, 2008 is recognition of the changing needs of the businesses in today’s times. The Government of India has made an endeavor to create a facilitating environment for entrepreneurs, service providers and professionals to meet the global competition; however it needs to be seen how far the change is useful.

One Person Company Incorporation

INTRODUCTION:

                         One person companies are in existence in certain countries. In India this concept has been mooted by the Ministry of Corporate Affairs by allowing One Person Companies in India in line with UK, China, USA, Australia, Singapore, Qatar, Pakistan and several other countries. It is a right thinking in right direction by the Ministry of Corporate Affairs. One Person Companies have been in existence in UK for several years now. China allowed formation of OPC's as recent as in 2005.

FEATURES OF ONE PERSON COMPANY:

 1. Complete Control Of The Company With The Single Owner:
This leads to fast decision making and execution. Yet he/she can appoint as many as 15 directors in the OPC for administrative functions, without giving any share to them.

2. Nominee for the Shareholder:
The Shareholder shall nominate another person who shall become the shareholders in case of death/incapacity of the original shareholder.  Such nominee shall give his/her consent and such consent for being appointed as the Nominee for the sole Shareholder.   Only a natural person, who is an Indian citizen and resident in India shall be a nominee for the sole member of a One Person Company.

3. Loan from Banks:
Banking and financial institutions prefer to lend money to the company rather than proprietary firms. In most of the situations Banks insist the entrepreneurs to convert their firm into a Private Limited company before sanctioning funds. So it is better to register your start-up as a One Person private limited rather than proprietary firm.

4. Tax Flexibility and Savings:
In an OPC, it is possible for a company to make a valid contract with its shareholder or directors. This means as a director you can receive remuneration, as a lessor you can receive rent, as a creditor you can lend money to your own company and earn interest. Directors' remuneration, rent and interest are deductible expenses which reduce the profitability of the Company and ultimately brings down taxable income of your business.

ADVANTAGES OF FORMING A ONE PERSON COMPANY:

1. The advantages of limited liability. The most significant reason for shareholders to incorporate the ‘single-person company' is certainly the desire for the limited liability.
2. OPC's are not proprietorship concerns; hence, they give a dual entity to the company as well as the individual, guarding the individual against any pitfalls of liabilities. This is the fundamental difference between OPC and sole proprietorship.
3. OPC's require minimal capital to begin with. Being a recognized corporate, could well raise capital from others like venture capital financial institutions etc., thus graduating to a private limited company.
4. The annual return of a One Person Company shall be signed by the company secretary, or where there is no company secretary,by the director of the company.
5. A One Person Company needs to have minimum of one director. It can have directors up to a maximum of 15 which can also be increased by passing a special resolution as in case of any other company.
6. The financial statements of a one person company can be signed by one director alone. Cash Flow Statement is not a mandatory part of financial statements for a One Person Company. Financial statements of a one person company need to be filed with the Registrar, after they are duly adopted by the member, within 180 days of closure of financial year along with all necessary documents.
7. Board's report to be annexed to financial statements may only contain explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report.
8. Mandatory rotation of auditor after expiry of maximum term is not applicable.

To know the procedure to start a one person company, click here.