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Companies Act, 2013 introduced the concept of One Person Company in India to promote self-employment and to motivate individuals who are capable of starting a business of their own. The need for two directors in a private limited company is eliminated which aids the entrepreneurs to have total control over their entity, and also enjoying limited liability. A nominee is required to be mentioned in the Memorandum & Articles of Association, who will take over the responsibility of the company in case the original member is dead or incapable by any cause.
It is convenient for the owner to approach other financial institutions other than banks because Banking and Financial Institutions give preference to companies over proprietary firms.
Nominee gets control over the company if the original owner is not able to discharge his duties due to death and any other eventuality. Therefore, the investment won’t be wasted.
One can experience complete authority over decision-making and implementation while the firm has been incorporated as a company.
Compliance comparatively lesser than Private Limited Company and there is no requirement for the Annual General Meeting, as the sole director can simply add the resolution in a minute book and sign it.
Compliances of a One Person Company
- Income Tax and Annual Return: Income tax filing an annual return filing must be completed by all One Person Company before 30th September of each financial year.
- GST Filing: Under the GST regime proposed to be rolled out in 2017, one person companies having GST registration would be required to file monthly, quarterly and annual GST returns.
- TDS Filing: Quarterly TDS returns must be filed by one person companies that have TAN and are required to deduct tax at source as per TDS rules.
- ESI Return: ESI return must be filed by all one-person companies having ESI registration. ESI registration is required once the one person company employs over 10 employees.
It takes approximately 5 to 8 working days to incorporate a One Person Company and it will depend on the submission of relevant documents and the speed of Government Approvals. To ensure the speedy process of incorporation it is recommended to choose a unique name for your Company and ensure you have all the required documents are provided before starting the incorporation process.
Register easily your One person Company with Company Registration Online
Why LLP is better than Private Limited Company
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