According to Section 2(62) of Companies Act, 2013, “One Person Company” means a company which has only one person as a member. A one person company can be incorporated as a private limited company only. It can have only one member at a point of time.
The words “ONE PERSON COMPANY” must be mentioned in brackets below the name of the company, wherever its name is printed, engraved or affixed. Minimum No. of director required is one and maximum limit is fifteen which can be increased by passing Special resolution.
The MOA of one person company shall indicate the name of the other person, who shall, in the event of death or incapacity to contract of the subscriber become the member of the company. Prior written consent from that person is needed to file with ROC alongwith MOA and AOA. Member of One person company may at any time change the name of such person by mentioning in MOA or by giving notice in the prescribed manner and such change shall be intimated by him to the company and further by company to ROC. However, such change of name of the person shall not be deemed to be alteration in MOA of the company.
If the AOA do not contain the name of the first director, then the person acting as member shall be deemed to the first director of the company till the time director(s) is duly appointed by following provisions of Law.
In case a one person company enters into any contract, not in the ordinary course of business, with its sole member who is also a director, then such contract must:
– either be in writing or
– entered in MOA or
– recorded in the minutes of the meeting held for the first time after entering of contract.
Particulars of such contract must be filed by the company with the ROC within 15 days of the approval of the contracts by the Board.
The annual return of one person company shall be signed by the Company Secretary or in case there is no Company Secretary, then by the director of the company.
Exemption is available to one person company from holding Board meetings (in case of single director) and general meetings. Atleast 1 board meeting must be held in each half year of the calendar year but the gap between two BMs should not be less than 90 days.
The Financial Statements of one person company can be signed by one director. 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. Cash Flow does not form a mandatory part of financial statements. Financial Statements of one person company needs to be filed with the registrar, after duly adopted by the member, within 180 days of closure of FY alongwith necessary documents.
Provisions regarding calling of an EGM by the Board or tribinual do not apply to a One Person Company. All provisions regarding AGM like notice period, contents of notice, quorum requirement, proxy etc. do not apply to such company. It shall be of sufficient compliance if all resolutions, OR or SR, required to be passed by the company at any GM, are communicated by the member to the company and entered into the minute book, signed and dated by the member.
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