1.ONE PERSON COMPANYhttp://www.bizandlegis.com

2. What is One Person Company? Company formed by a single person one-person company in the legal system is a move thatwould encourage corporatisation of business andentrepreneurship OPC is a one shareholder corporate entity. legal and financial liability is limited to the company only. http://www.bizandlegis.com 3. Salient Features of OPC Promotes entrepreneurship across the country. de-risks the business by transferring the promoters liability to the company. very little paper work the Articles of Association would be simple and short If same person is doubling as director and shareholder there would be no needfor board or shareholders meetings. Quorum requirements, proxies, maintaining of various registers of members,filing of multiple e-forms fade away, leaving the single operator free from thefetters of corporate governance, except that he has to maintain his books ofaccounts, prepare and file annual audited balance sheet and profit and lossaccounts, without the Boards report. The memorandum of a One Person Company shall indicate the name of theperson who shall, in the event of the subscribers death, disability or otherwise,become the member of the company. The memorandum of a company shall state the last letters and word OPCLimited in the case of a One Person limited company. The One Person Companies are also not required to hold any Annual GeneralMeeting under the new Companies Draft Bill, 2009. This facility is notextended towards any other type of companies. http://www.bizandlegis.com 4. Company vis--vis ONE PERSONCOMPANYCommon Seal Perpetual SuccessionSeparate financesSeparate legal entity Separate property Limited liability Management and Controlhttp://www.bizandlegis.com 5. OPC v/s SOLE PROPRIETORSHIPOPC Sole proprietorship Separate legal entity Owner & entity is samepersonality Limited Liability Unlimited Liability Debt- not the sole responsibility Debt - sole responsibility of theof the ownerowner Finance- credit record of the Finance- credit history of thecompany owner Legal requirements- will need Legal requirements- will notto register itself as suchhave to draw up paper declaringits status Tax paid by the owner Separate taxhttp://www.bizandlegis.com 6. One Person Company In ForeignJurisdictions China1. introduced it in October 2005) in which the promoting individual is both the director and the shareholder.2. In China, one person is allowed to apply for opening a limited company with a minimum capital of 1, 00,000 Yuan. The amended law of China prescribes that the owner should pay the investment capital at one time and bars him from opening a second company of the same kind. Pakistan1. The amended company law of Pakistan permits one person to form a single-member company by filing with registrar, at the time of incorporation, a nomination in the prescribed form indicating at least two individuals to act as nominee director and alternate nominee director.http://www.bizandlegis.com 7. U.K.1. U.K.Companies Act, 2006 & the Companies (Single Member) Private Companies Regulations 1992Singapore1. Company Amendment Act of 2004 and other regulationsUnited Arab Emirates1. One Person Company recognized2. Only Articles of AssociationUnited States1. In US, several states permit the formation and operation of a single-member Limited Liability Company (LLC).In most countries, the law governing companies enables a single- member company to have more than one director and grants exemptions to such companies from holding AGMs, though records and documents are to be maintained. http://www.bizandlegis.com 8. ONE PERSON COMPANY ININDIA J.J Irani Report Companies Bill, 2009 http://www.bizandlegis.com 9. Draft Companies Bill, 2009 The Draft Companies Bill, 2009, (Bill No. 59 of 2009),as introduced in Lok Sabha on 3rd august 2009,introduces the OPC concept for the first time in India. The Bill will provide a substantive legal frameworkwhile leaving the procedural issues to the rules to benotified subsequently. Articulation of shareholders democracy withprotection of the rights of minority stakeholders,responsible self regulation with disclosures andaccountability has been the objective behind thissimplified company law.http://www.bizandlegis.com 10. Provisions Under Company Bill One Person Company is defined under section 2(1) (zzk) as: One Person Company means a company which has only one person as a memberhttp://www.bizandlegis.com 11. Section 3(1) (c) deals with the formation of One Person Company. Itstates:One person, where the company to be formed is to be a One PersonCompany, by subscribing their names or his name to a memorandum inthe manner prescribed and complying with the requirements of this Actin respect of registration:Provided that the memorandum of a One Person Company shallindicate the name of the person who shall, in the event of thesubscribers death, disability or otherwise, become the member of thecompany:Provided further that it shall be the duty of the member of a One PersonCompany to intimate the Registrar the change, if any, in the name of theperson referred to in the preceding proviso and indicated in thememorandum within such time and in such form as may be prescribed,and any such change shall not be deemed to be an alteration of thememorandumwww.bizandlegis.com 12. Section 5(1) deals with the memorandum of the OnePerson Company. It statesThe memorandum of a company shall state the lastletters and word OPC Limited in the case of a OnePerson limited company. Section 13(1) a, b, c deals with alteration of articlesincluding the conversion of Private Companies, PublicCompanies to One Person Companies and vice-versa.One very important feature of the OPC concept is theconduction of Annual General Meeting. Section 85(1) of the Draft Bill excludes One PersonCompany from holding Annual General Meeting atleast once in a year. www.bizandlegis.com 13. Section 171 is perhaps the most important and fascinating provision to look out for. Itstates:Contracts by One Person Companies-171. (1) Where a One Person Company limited by shares or by guarantee enters into acontract with the sole member of the company who is also director of the company, thecompany shall, unless the contract is in writing, ensure that the terms of the contract oroffer are contained in a memorandum or are recorded in the minutes of the first meetingof the Board of Directors of the company held next after the entering into the contract: Provided that nothing in this sub-section shall apply to contracts entered into by thecompany in the ordinary course of its business. (2) The company shall inform the Registrar about every contract entered into by thecompany and recorded in the minutes of the meeting of its Board of Directors under sub-section (1) within fifteen days of the date of approval by the Board of Directors with suchfee as may be prescribed, or with such additional fee as may be prescribed within thetime specified, under section 364. (3) Where the company fails to inform the Registrar under sub-section (2) before theexpiry of the period specified under section 364 with additional fee, the company shall bepunishable with fine which shall not be less than twenty-five thousand rupees but whichmay extend to one lakh rupees and every officer who is in default shall be punishablewith imprisonment for a term which may extend to six months or with fine which shallnot be less than twenty-five thousand rupees but which may extend to one lakh rupees, orwith both. www.bizandlegis.com 14. Conclusion OPCs are imperative because they would giveentrepreneurial capabilities of people an outlet forparticipation in economic activity and such economicactivity may take place through the creation of an economicperson in the form of a company. However, there has been criticism in certain quartersagainst the formation of such a company as it may giveroom for evasion of public funds and tax liability by anindividual. Whether only an individual or even a legal person can forma one-person company? Whether a single member can form a company without anylimit on the paid-up capital or some ceiling? 15. If the turnover of the one-person company exceedscertain limits, whether it should to be converted intoprivate/public limited small entrepreneurs who are running their businessesunder the proprietorship model could convert to OPCs,with the benefit of limited liability and none of thecumbersome compliance requirements. On a positive note, OPCs are expected to attractinvestors who were earlier afraid to take risk ininvesting in sole proprietorship business because ofunlimited liability. Process of starting a business getting simpler it couldbe a boon for every form of small business. Opportunity for a lot of Non Resident Indians (NRIs)and Persons of Indian Origin (PIOs) who can set uptheir companies in India. www.bizandlegis.com 16. QUESTIONS ??? www.bizandlegis.com 17. THANK YOU http://www.bizandlegis.com