One Person Company
Formation of One Person Companies
A single person can form an OPC by subscribing his name to the memorandum of association and fulfilling other requirements prescribed by the Companies Act, 2013. Such memorandum must state details of a nominee who shall become the company’s sole member in case the original member dies or becomes incapable of entering into contractual relations.
This memorandum and the nominee’s consent to his nomination should be filed to the Registrar of Companies along with an application of registration. Such nominee can withdraw his name at any point in time by submission of requisite applications to the Registrar. His nomination can also later be canceled by the member.
Membership in One Person Companies
Only natural persons who are Indian citizens and residents are eligible to form a one-person company in India. The same condition applies to nominees of OPCs. Further, such a natural person cannot be a member or nominee of more than one OPC at any point in time.
It is important to note that only natural persons can become members of OPCs. This does not happen in the case of companies wherein companies themselves can own shares and be members. Further, the law prohibits minors from being members or nominees of OPCs.
Private Limited Company
What Is a Private Limited Company?
A private limited company is a privately held business entity held by private stakeholders. The liability arrangement, in this case, is that of a limited partnership, wherein the liability of a shareholder extends only up to the number of shares held by them.
With the startup ecosystem booming across the country and more and more people looking to do something on their own, there is a need to be well-acquainted with different business registration types, i.e. sole proprietorship, limited liability company, and private limited company.
In legal terms, Section 2 (68) of the Companies Act, 2013 defines a private company as: “A Company having a minimum paid-up share capital as may be prescribed and which, by its articles,—(i) restricts the right to transfer its shares; (ii) except in case of One Person Company, limits the number of its members to two hundred; (iii) prohibits any invitation to the public to subscribe for any securities of the company.”
In this article, we will talk about different sides of a private limited company.
Private companies have the upper hand over public companies concerning investment in long-term strategies. A private limited company keeps the values of its shares and financial figures discreet, with freedom, and flexibility of operations.
Characteristics of a Private Limited Company
Now that you know what a pvt. limited company is, the next step is to know the characteristics of such a company.
Following are some of the main features of a pvt limited company:
- Membership
- Limited Liability Structure 3. Separate Legal Entity
- Minimum Paid-Up Capital
The requirements for registering this are as stated below:
- Members and Directors
- Name of the Company
- Registered Office Address
- Obtaining Other Documents v Public Limited Company
What Is Public Limited Company?
Public Limited companies are owned and run by owners but still they have separate set of rules, obligations and regulations and legal rights. The owners of the public limited company are known as shareholders or stakeholders of the company. The ownership of the entity is split in to multiple units known as equity shares. The minimum of shareholders is ‘7’ which means there should be at least 7 different owners at any point of time. There is no maximum limit for the number of shareholders in Public Limited companies.
Definition
Public Limited Company is governed by the Companies Act of 2013, which defines it as a company which is not a “private company”, “has a minimum amount of capital as prescribed” and “has a minimum of seven shareholders”. The companies Act regulates the working of Public Limited Company. A Public Limited Company offers shares to the general public and has limited liability. Its stock can be acquired by anyone, either through IPO i.e. initial public offering or via stock market. It is strictly regulated and is required to publish its true financial reports to the shareholders.
How Do Public Limited Companies Work?
Public Limited Company in India can be either registered or unregistered on the share market. Its completely on to them whether they want to register or not. The listing of the company on the stock market they are ordered to showcase their financial year reports and illustrate the economic condition to enrich investor and stake holders belief and also gain public trust.
The lifespan of the shareholder in a publicly held company doesn’t impact how long it will continue to be a firm. These businesses can be used to raise capital but also have increased regulation.
Requirements of a Public Limited Company
Rules prescribed for Public Limited Company as per Companies Act, 2013 are
- Minimum 7 shareholders are required to form a public limited company.
- Minimum of 3 directors is required to form a public limited company.
- A minimum authorized share capital of Rs. 1 lakh is required.
- Digital signature certificate (DSC) of one of the directors is needed while submitting selfattested copies of identity and address proof.
Directors of the proposed company will need a DIN.
- The name of the company must be as per the provision of the Company Act and Rules.
- Documents like the Memorandum of Association (MOA), Articles of Association (AOA) and duly filled Form DIR – 12 is needed.
- Payment of the prescribed registration fees to the ROC is required.
Section 8 Company
Formation of Section 8 company
Under Section 8 of the Companies Act, a person or a group of people can apply to the Registrar of Companies with the necessary forms to incorporate a charitable corporation. If satisfied, the Central Government can accept such an application on any terms and conditions set by the license it has granted. After the company has been accepted, the Registrar of Companies will register it after the applicants have paid all of the required costs.
It’s crucial to keep in mind that such businesses can only be limited. In this circumstance, all limited company advantages and liabilities apply. Furthermore, unlike all other corporations, these ones do not have to include the terms “Limited” or “Private Limited” in their names.
Because such firms’ existence is predicated on the license granted to them, they are unable to change their memorandum or articles of the organization without the authorization of the Central Government. They also aren’t allowed to do anything that the license forbids.
Eligibility to apply for section 8 companies
If an individual or group of individuals has the following purposes or goals, they are entitled to register as a Section 8 Company. The goals must be confirmed to the satisfaction of the government at large.
When a business wants to promote science, commerce, education, art, sports, research, religion, charity, social welfare, environmental preservation, or similar goals
When the company intends to use all profits (if any) or any income earned after formation solely for the promotion of such purposes
When a firm decides not to pay a dividend to its shareholders
Documents Required for Section 8 Company Registration
- Digital Signature Certificate
- Memorandum of Association
- Articles of Association
- Passport Size Photographs
- Members’ Id Proof such as Aadhaar Card, Passport, Voter Id
- Details of Director (When the Members Are Other Companies/LLPs)
- Address Evidence
- Director Identification Number
v Producer Company
A Producer Company is a body corporate registered under the Companies Act, 1956; and having specified objects and activities. Ownership and membership of such companies is held only by ‘Primary Producers’ or ‘Producer Institution’, and member equity shall not be publicly traded. However it may be transferred, only with the approval of the board of directors of the Producer Company.
A producer Company can be formed by
- Any ten or more persons engaged in any activity connected with primary produce, or
- Any two or more producer institutions or companies, or
- A combination of ten or more individuals and producer institutions.
“Producer” means any person engaged in any activity connected with or relatable to any primary producer such as:
- Produce of farmers of agriculture including animal husbandry, horticulture, floriculture, pisiculture, viticulture, forestry, forest products, revegetation, bee-raising and farming plantation products and produce from any other primary activity or service which promotes the interest of farmers or consumers.
- Produce of persons engaged in handloom, handicraft and other cottage industries
Process of Formation of Producer Company
- Awareness Building
- Business Plan Preparation
- Market Study
- Formation of Commodity Interest Groups
- Selection of 5-15 Director Board Members
- Compiling to Legal Process and Formal Registration
v Nidhi Company
Nidhi Company is a type of Non–Banking Financial Company (NBFC). It is formed to borrow and lend money to its members. It inculcates the habit of saving among its members and works on the principle of mutual benefit. These companies typically operate in the southern part of the country. Nidhi Company isn’t required to receive the license from Reserve Bank of India (RBI), hence it is easy to form. It is registered as a public company and should have “Nidhi Limited” as the last words of its name.
Activities Prohibited in a Nidhi Company
Nidhi Company can’t deal with chit funds, hire-purchase finance, leasing finance, insurance or securities business. It is strictly prohibited from accepting deposits from or lending funds to, any other person except members.
Also, it can’t advertise itself to ask for any deposits.
Number of members
Minimum of seven members is required to start a Nidhi Company out of which three members must be the directors of the company.
Share Capital and Owners’ Funds
A minimum of 5 lakh rupees, is required as the equity share capital to start a Nidhi Company. Nidhi Company can’t issue preference shares.
Documents required for registration
- Proof of the registered place of business (Ownership documents/ rent or lease agreement)
- No Objection Certificate (signed by the owner/ landlord)
- Identity proofs
- Address proofs of the members
- Photos of the members
- PAN card copies of the members
- Digital Signature (DSC)
- Director Identification Number (DIN) of the directors
- Memorandum of Association of the company (MoA)
- Articles of Association of the company (AoA)
- Only one object will be mentioned in MoA of the company: “cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit..”
Forms to be filed
There are two forms which are required to be filed.
- INC 9
- DIR 2
Conditions to be fulfilled for getting ‘Nidhi’ status
Within one year of its registration
- Nidhi Company should have minimum 200 members within one year from commencement
- Also, the net owned funds should be 10 lakh rupees or more. Net owned funds = Equity share capital + free reserves (-) accumulated losses (-) intangible assets
- Unencumbered term deposits must be 10% or higher of the outstanding deposits
- The ratio of net owned funds to deposits shouldn’t be more than 1:20
If Nidhi Company satisfies all above conditions, it should file NDH-1 along with prescribed fees within 90 days from the end of the first financial year after incorporation. The form must be duly certified by practicing CA/ CS/ CWA.
Extension of another financial year can be availed upon submission of NDH-2 to the Regional Director within 30 days from the end of the first financial year.
If even after the second financial year, it doesn’t fulfill the requirements, it can’t accept deposits till it complies with the provisions, and also penalty will be imposed.
NGO Society What is an NGO?
Non-governmental organizations, or NGOs, were first called such in Article 71 in the Charter of the newly formed United Nations in 1945. While NGOs have no fixed or formal definition, they are generally defined as non profit entities independent of governmental influence (although they may receive government funding).
As one can tell from the basic definition above, the difference between nonprofit organizations (NPOs) and NGOs is slim. However, the term “NGO” is not typically applied to U.S.-based nonprofit organizations. Generally, the NGO label is given to organizations operating on an international level although some countries classify their own civil society groups as NGOs.
What is Society?
Society refers to a complex network of individuals who interact, share common values, and form organised communities. It is a system that shapes human behaviour, beliefs, and relationships through social institutions, cultural norms, and shared practises. Society provides a framework for social organisation, cooperation, and the development of social structures. It encompasses various aspects of human life, including economic systems, political structures, and social interactions. Society plays a fundamental role in shaping individual identity, socialisation, and collective progress, creating a sense of belonging and interconnectedness among its members.