ONE PERSON COMPANY(OPC) – A Comprehensive Outlook BASIC CONCEPT The concept of an entity called a One Person Company (OPC) has been introduced by the Companies Act, 2013. Earlier, a company involved at least 2 persons to begin with. In such a company, a single person is the sole shareholder of the company who may as well be the Sole Director. The purpose is to enable small businessmen to function with a corporate identity, a separate legal entity having limited liability and Perpetual Existence, while remaining independent. Also, Compliances in case of an OPC are a lot less as compared to those in case of a Private Limited Company, in effect reducing costs. The member must appoint a nominee, and take prior written consent from …show more content…
Be a nominee in an OPC IMPORTANT POINT: A person cannot incorporate or become a nominee in more than 1 OPC at a time. [Rule 3 of Companies (Incorporation) Rules, 2014] Thus, it is clear that no other form of entity can own an OPC, except an ‘living human being’ to be precise. 2. Prepare Memorandum and Articles– Format has been prescribed in the Companies Act, 2013 (Schedule I, Table A & Table F) 3. The Procedure for Incorporation is as under – i. Name reservation: Form INC-1 needs to be filed for name availability. ii. Incorporation: After name is approved, form INC-2 will be filed for incorporation of the OPC within 60 days of filing form INC-1. • Form INC-22 must be filed within 30 days once form INC-2 is registered in case the address of correspondence and registered office address are not same. NOMINEE Now, this concept is an essential 1. The member of an OPC must appoint a ‘NOMINEE’, after obtaining prior written consent from him. 2. On death of member, such nominee becomes the member of the OPC and is entitled to the same dividends, rights and liabilities as the deceased member. 3. Such person shall then appoint a new nominee within 15 days. DIRECTOR(S) [Section …show more content…
• Minimum no. of board meetings to be compulsorily held in a year = 2 (1 in each half of calendar year with at least 90 days gap between the 2 meetings in the year) GENERAL MEETINGS AND RESOLUTIONS 1. Holding of AGM is not mandatory for OPC. [Section 96(1)] 2. Section 98 and section 100 to 111 do not apply to OPC. [Section 122(1)] 3. For passing any shareholder’s resolution (whether ordinary or special), it shall be sufficient if – [Section 122(3)] a. The resolution is communicated by the member to the company b. It is entered in the minutes book required to be maintained under section 118 c. It is signed and dated by the member (such date shall be deemed to be the date of the meeting for all the purposes under the Act) ANNUAL FINANCIAL STATEMENTS, ANNUAL FILING AND AUDIT 1. Cash Flow Statement is not mandatory for an OPC. [Section 2(40)] 2. The financial statements may be signed by only one director before submission to auditor. [Section 134(1)] 3. Board Report to be annexed to financial statements need to contain only 1 thing– “Explanations or comments by the board on every qualification, reservation or adverse remark or disclaimer by the auditor” [Section
The Society shall also have, as ex-officio members, faculty advisors whose prerogatives shall be to advise the society.
(ii) in the case of the property acquired in the exchange, the 2-year period beginning on the date of such acquisition.
requirement as part of the human rights act 1998 and therefore must be adhered to at
There are many different types of business structures, but if you own and operate a business that it is a sole
The first step in creating the IPO is to hire an investment bank and negotiate a contract. The contract will state the type of securities (either stocks or bonds), the amount of capital to be raised, and the details of the actual underwriting agreement. The company and the investment bank determine the structure of the contract. There are two different types of structured agreements. The first type of structured agreement is the firm commitment agreement, in which the underwriter guarantees that a certain amount of capital will be raised.
...ust make an allegation of negligence”. It seems too easy for the shareholder to bring the action without knowing their hidden agenda. Second, the courts will be more involved with companies' internal management as they are given the full power of giving permission on a derivative action. Besides that, the filtering process is a time-consuming and will affect the interest of the company. Third, even after the prima facie case has been proven, the court must dismiss the claim if it falls under section 263(2). Lastly, when it regards to the court’s discretion whether to allow the claim to proceed, the court has to spend more time to analyze the requirement of good faith, various combinations of interest within the company as a whole, the views of the independent members, the ratification analysis and accordingly shifting away to the nature of the wrongdoing itself.
As a consequence of the separate legal entity and limited liability doctrines within the UK’s unitary based system, company law had to develop responses to the ‘agency costs’ that arose. The central response is directors’ duties; these are owed by the directors to the company and operate as a counterbalance to the vast scope of powers given to the board. The benefit of the unitary board system is reflected in the efficiency gains it brings, however the disadvantage is clear, the directors may act to further their own interests to the detriment of the company. It is evident within executive remuneration that directors are placed in a stark conflict of interest position in that they may disproportionately reward themselves. The counterbalance to this concern is S175 Companies Act 2006 (CA 2006) this acts to prevent certain conflicts arising and punishes directors who find themselves in this position. Furthermore, there are specific provisions within the CA 2006 that empower third parties such as shareholders to influence directors’ remuneration.
Although small businesses do not make a lot of major deals with large investors, most small businesses create profit revenue greater than large corporations. Small business creators are very brave considering only ten percent of small businesses survive. Unfortunately, some communities do not support local small businesses; they only support the large brand name and force small businesses to die out. Since small businesses will not have a name brand known around the world, many people from communities will not support them because they are not known on a national scale. “This, in turn will affect the local economy and drive capital out of their local economy. On average, for every one hundred dollars spent in an economy, if spent on a
In effect Salomon's principle as confirmed by Macaura v Northern Assurance Co. and Lee v Lee's Air Farming Ltd. helps form an image of a corporation as a 'depersonalised conception'[5], an object that is 'cleansed and emptied of its shareholders. '[6] Yet the concept of an incorporated company as a separate legal person causes some difficulties, for surely all 'legal personality is in a sense fiction'.[7] Questions soon arise ... ... middle of paper ... ...
Under corporate business law, stockholders are the owners of the corporation. But, considering the complexities of the daily operations of the corporation, each stockholder may not be given an authority to control its operation. Instead, they appoint directors among them, who likewise appoint officers or executives to manage the corporation.
In company law, registered companies are complicated with the concepts of separate legal personality as the courts do not have a definite rule on when to lift the corporate veil. The concept of ‘Separate legal personality’ is created under the Companies Act 1862 and the significance of this concept is being recognized in the Companies Act 2006 nowadays. In order to avoid personal liability, it assures that individuals are sanctioned to incorporate companies to separate their business and personal affairs. The ‘separate legal personality’ principle was further reaffirmed in the courts through the decision of Salomon v Salomon & Co Ltd. , and it sets the rock in which our company law rests which stated that the legal entity distinct from its
The committee must be given authority to establish remuneration packages for directors within the upper and lower limits. These ceilings and floors must be duly approved by the shareholders in AGM in advance.
Finally I will state whether or not I agree with the given statement.cobd bdr sebdbdw orbd bdk inbd fobd bd. When a company receives a certificate of incorporation it has a 'separate legal personality'. In law the company becomes a legal person it its own right. The fundamental concept to become familiar with when starting up a business is the idea that the business has a legal personality in its own right, particularly when it assumes the form of a limited liability company. This essentially means that if one commences business as a limited liability company, then the corporation... ...
According to Corporation Act 2001 s124(1), it illustrates that ‘’A company has the legal capacity and powers of an individual both in and outside the jurisdiction” . As it were, company as a legal individual must be freely with all its capital contribution shall embrace liability for its legal actions and obligations of the company’s shareholders is limited to its investment to the company. This ‘separate legal entity’ principle was established in the case of Salomon v Salomon & Co Ltd [1987] as company was held to have conducted the business as a legal person and separate from its members. It demonstrated that the debt of company is belonged to the company but not to the shareholders. Shareholders have only right to participate in managing but not in sharing the company property. Besides ,the Macaura v Northern Assurance Co Ltd [1925] demonstrates that the distinction between the shareholders and company assets. It means that even Mr Macaura owned almost all the shares in the company, he had no insurable interest in the company’s asset. The other recent case is the Lee v Lee’s Air Farming Ltd [1961] which illustrates that the distinct legal entities between employee ad director allows Mr.Lee function in dual capacities. It resulted that the corporation can contract with the controlling member of the corporation.
In a much broader sense, the owners of a corporation can be further divided into shareholders and board members. A shareholder is defined as an individual, company or institution that holds a share in the company. Shareholders can, hence, be regarded as the owners of the company and, therefore, have several legal rights. Shareholders are important providers of the company’s capital and, therefore, have a significant amount of influence in the management of the company. According to Friedman, a corporate executive 's responsibility to his owners includes carrying out business operations that fulfil the owners ' or shareholders ' desires of maximizing profits in accordance with the legal and ethical rules followed by society. Apart from maximizing shareholder value, a corporation must provide shareholders the right to vote in the organization and the liberty to buy and sell shares as they