“One Person Company” means a company which has only one person as a member. To proceed with the functions of a company, its registration is a mandatory requirement.
According to section 2(64) of the Companies Act of 2013, “One Person Company” means a company which has only one person as a member. To proceed with the functions of a company, its registration is a mandatory requirement. The present article will explain the complete procedure required to be followed to register a One Person Company.
STEP 1: Before proceeding, the proposed director shall apply for a Digital Signature Certificate also called the DSC. DSC is the signature of a person but in digital form. This is required while signing e-forms. These are granted by the Certifying Authority (CA) having a license under section 24 of the Indian IT-Act 2000[1]. Following are the Certifying Authorities.[2]
- National Informatics Center
- IDRBT Certifying Authority
- SafeScrypt CA Services, Sify Communications Ltd.
- Code Solutions CA
- E- MUDHRA
- CDAC
- NSDL
- Capricorn
While applying for the same original supporting documents and self-attested copies shall be attached. The documents required include address proof, Aadhaar card, PAN card, photo, and information like Email ID and phone number. DSCs are also offered by certain Chartered Accountants using Aadhar e-KYC based authentication. A letter or certificate issued by a Bank containing the DSC applicant’s information as retained in the Bank database can also be accepted. This must be certified by the bank manager.
STEP 2: Secondly, the director not having a DIN who proposes to become the first director in a newly formed company will have to make an application through eForm SPICe. He must attach the proof of Identity and address along with the application. Once the form gets approved, DIN will be allocated.
STEP 3: Thirdly, the director can opt-out in the following ways.
Incorporation through SPICe (Simplified Proforma for Incorporating a Company electronically) without filling RUN (Reserving Unique Names):
The stakeholders can choose out of 5 different services:
- Name Reservation
- Allotment of Director Identification Number (DIN)
- Incorporation of New Company
- Allotment of PAN (Permanent Account Number)
- Allotment of TAN (Tax Deduction and Collection Account Number) in one form by applying for Incorporation of a new company through SPICe form (INC-32[3])
Incorporation through SPICe (With RUN)
RUN (Reserving Unique Names) is used for name availability.
After the approval of the name, form SPICe shall be filed for incorporation within 20 days from the date of approval of RUN. In case the correspondence address and registered office address are not the same, the company shall file form INC-22 [4]within 30 days.
STEP 4: Fourthly, comes the Registrar of Companies where the company is to be registered after sending valid documents. These documents include:
- Memorandum of Association: A memorandum is a charter of a company. Section 2(56) of the Companies Act 2013[5] defines a memorandum. This also acts as a constitution. This is an original framed document that can be altered from time to time. It contains the fundamentals based on which a company performs its functions. According to section 4 of the aforementioned act, a MoA contains the following:
- Name Clause
- Situation Clause
- Object Clause
- Liability Clause
- Capital Clause
- Articles of Association: As mentioned in section 2(5) of the Companies Act[6], Articles of Association mentions the regulations and the purpose of a company. This document highlights how tasks should be fulfilled within an organization, including the handling and drafting of financial records. This record lays down the company’s by-laws on which it operates.
- Appointment of Nominee: Since One Person Company has just one director, another person shall be nominated on his behalf for emergencies. In case the only director becomes incapacitated or dies and cannot perform his duties, this nominee will have to perform his duties by taking his place. He needs to fill Form INC-3[7] for applying for a nominee. PAN cards and Aadhar cards are mandatory requirements as attachments.
- Proof of Registered Office: Along with the proof of ownership and a Non-Objection Certificate (NOC), a registration proof of the office must also be submitted. The following documents must be attached during the company registration process or within 30 days of incorporation of the company:
- The registered document of the title of the premises of the registered office in the name of the company.
- The notarized copy of lease/rent agreement in the name of the company along with a copy of rent paid receipt not older than one month.
- Affidavit and consent of the Director: The director must fill the form number INC-9[8] and DIR-2 giving their consent and declaration.
- Filing of forms with MCA: All these aforementioned documents shall be attached to SPICe Form, SPICe-MOA (Memorandum of Association) and SPICe-AOA (Articles of Association) along with the DSC (Digital Signature Certificate) of the Director and the professional, and must be uploaded to the MCA site for approval.
Once the uploading work is done, Form 49A[9] and 49B[10] will be generated for the PAN and TAN generation of the Company which should be further uploaded to MCA after affixing the DSC of the proposed Director.
- Issuance of Certificate of Incorporation: After verification, once the Registrar of Companies is satisfied with the documents, it will issue the Certificate of Incorporation of Company. It’s only after obtaining this certificate that the company can proceed with their daily chores.
[1] Section 2(64), Companies Act, 2013, “One Person Company” means a company which has only one person as a member ,Source Link.
[2]Section 24, Information Technology Act, 2000, Procedure for grant or rejection of license. The Controller may, on receipt of an application under sub-section (1) of section 21, after considering the documents accompanying the application and such other factors, as he deems fit, grant the license or reject the application: Provided that no application shall be rejected under this section unless the applicant has been given a reasonable opportunity of presenting his case, Source Link.
[3] Source Link.
[4] Source Link.
[5] Section 2(56) of the Companies Act 2013, “Memorandum” means the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous company law or of this Act, Source Link.
[6] Section 2(5) of the Companies Act, “Article”means the articles of association of a company as originally framed or as altered from time to time or applied in pursuance of any previous company law or of this Act, Source Link.
[7] Source Link.
[8] Source Link.
[9] Source Link.
[10] Source Link.