One Person CompanyAccording to the Companies Act, 1956, Minimum 7 members are required to incorporate a Public limited company while only 2 members are needed to register a private limited company. As per provision of section 2(62) of the companies act, 2013, one can start a one-person company in India that requires only one member to form a legal entity. The main benefit of forming a one-person company is that it is a separate legal entity that provides legal protection to the shareholders in the form of limited liability. All those provisions which are applicable to private companies are also applicable to the one person company (OPC)
How to Form a One Person CompanyAccording to the Rule 3 of the Companies (Incorporation) act, 2014, the one person company member should be an Indian citizen and a resident of India. He/she should not be a minor. Resident of India means a person who lives in India for a time period of at least 182 days in a financial year.A natural person means a normal person. It is not an entity such as a HUF, a corporate body, a partnership firm, or a sole proprietorship. A foreign citizen or non-resident Indian is not allowed to make an OPC in India. Minimum one director is required for the formation of an OPC. It must have one promoter also. Director & promoter can be the same person. As per rule 3 of companies (incorporation) rules, 2014, a person is not eligible to become a member or a nominee of more than one OPC.
It is very essential to choose the nominee of a member of an OPC. The consent of the nominee is required in a written form. A nominee can only take up the charge and become the member of the company, if the member is died or incapable of contract.