With the established of the Companies Act, 2013, a new type of company that entrepreneurs could establish was a one-person company. More often than not, people with sole proprietorships opt for company incorporation as a one-person company, as it easily allows them to transition into a corporate framework. This is primarily because a one-person company functions as a hybrid between a sole proprietorship and a corporate company, allowing greater flexibility in terms of legal requirements.
If you’re wondering how to register a company in India as a one-person company, note that only a single shareholder is required to do so. Additionally, for the company registration to take place, there must also be a minimum of one director. However, keep in mind that if your company exceeds an annual turnover of 2 Crore, then you have to register as a pvt. Ltd company. While this may not be relevant during the early stages of your business, it may become a pertinent issue later.
One-person companies are not liable to hold annual meetings. In fact, they are only required to have a board meeting twice a year as section 174 of the Companies Act 2013, related to board meetings doesn’t apply to such companies. This makes them very easy to run.
Most banking and financial institutions prefer lending their money to businesses that have undergone the company incorporation instead of proprietorships.
In the event of a financial crises, you can rest assured that your personal assets will not be seized by the bank as you can enjoy a limited liability.
Financial elements such as a Director’s remuneration, rent, and interest are tax-deductible, ensuring you have to pay fewer taxes and enjoy higher profits.
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Company registration begins with obtaining digital signatures. The digital signature certificate must be provided by the solepromoter and the nominee for processing the incorporation.
Our Startup India will help you identify three or four unique names, the application for name reservation is submitted to the MCA.The name selected must conform to the naming standards, and the name of the OPC must end or include the words (OPC).
Company incorporation documents can then be submitted to the Ministry of Corporate Affairs (MCA). On filing for incorporation, approval is granted by the Registrar of Companies (ROC). In case there are any issues with the documents submitted, the application for incorporation can be resubmitted.
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