valid as on 12/12/2019

Section 3.Formation of company.
Effective from 01-04-2014 and font in blue from 09-02-2018

(1) A may be formed for any lawful purpose by—

(a) seven or more persons, where the company to be formed is to be a ;
(b) two or more persons, where the company to be formed is to be a ; or
(c) , where the company to be formed is to be that is to say, a private company, by subscribing their names or his name to a and complying with the requirements of this Act in respect of registration:

 that the memorandum of One Person Company shall indicate the name of the other person, with his prior written consent in the , who shall, in the event of the subscriber’s death or his incapacity to contract become the of the company and the written consent of such person shall also be filed the at the time of incorporation of the One Person Company along with its memorandum and articles:

Provided further that such other person may withdraw his consent in such manner as may be :

Provided also that the member of One Person Company may at any time change the name of such other person by giving notice in such manner as may be :

Provided also that it shall be the duty of the member of One Person Company to intimate the company the change, if any, in the name of the other person nominated by him by indicating in the memorandum or otherwise within such time and in such manner , and the company shall intimate the Registrar any such change within such time and in such manner as may be :

Provided also that any such change in the name of the person shall not be deemed to be an  of the memorandum.

(2) A company formed under sub-section (1) may be either—

(a) a company limited by shares; or
(b) a ; or
(c) an .

that a Specified IFSC public company shall be formed only as a company limited by shares.

 that a Specified IFSC private company shall be formed only as a company limited by shares

Sec. 3A

If at any time the number of members of a company is reduced, in the case of a public company, below seven, in the case of a private company, below two, and the company carries on business for more than six months while the number of members is so reduced, every person who is a member of the company during the time that it so carries on business after those six months and is cognisant of the fact that it is carrying on business with less than seven members or two members, as the case may be, shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued therefor.

2 (20) Company means a company incorporated under this Act or under any previous company law
2(71) Public Company, means a company which—

(a) is not a private company and;

(b) has a minimum paid-up share capital, as may be prescribed:

Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles.

2(68) Private company means 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:

Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member:

Provided further that—

(A) persons who are in the employment of the company; and

(B) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and

(iii) prohibits any invitation to the public to subscribe for any securities of the company

Refer Rule 3 of The Companies(Incorporation)Rules,2014. To view the rule,Click Here
2(62) One Person Company means a company which has only one person as a member
2(56) Memorandum means the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous company law or of this Act
Refer Rule 4 of The Companies(Incorporation)Rules,2014. To view the rule,Click Here
Refer Form No.INC 3. To view the returns,Click Here
2(55) Member, in relation to a company, means—

(i) the subscriber to the memorandum of the company who shall be deemed to have agreed to become member of the company, and on its registration, shall be entered as member in its register of members;

(ii) every other person who agrees in writing to become a member of the company and whose name is entered in the register of members of the company;

(iii) every person holding shares of the company and whose name is entered as a beneficial owner in the records of a depository

Refer Form No.INC-2. To view the return,Click Here
2(75) Registrar means a Registrar, an Additional Registrar, a Joint Registrar, a Deputy Registrar or an Assistant Registrar, having the duty of registering companies and discharging various functions under this Act
Refer Rule 4(3),(4) & Form Nos.INC-4 of The Companies(Incorporation)Rules,2014. To view the rule,Click Here
Refer Rule 4(5) & Form Nos. INC-3 and INC-4 of The Companies(Incorporation)Rules,2014. To view the rule,Click Here
Refer Rule 4 of The Companies(Incorporation)Rules,2014.To view the rule,Click Here
Refer  Form No.INC-4 . To view the return,Click Here
2(3) Alteration includes the making of additions, omissions and substitutions.
2(21) Company limited by guarantee means a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up
2(92)  Unlimited company means a company not having any limit on the liability of its members
Inserted vide Exemption Notification to specified IFSC Public Companies, GSR 08 (E) dated 04.01.2017. To view the notification Click Here
Inserted vide Exemption Notification to specified IFSC Private Companies GSR 9(E) dated 04.01.2017. To view the notification Click Here
Inserted vide Companies (Amendment) Act, 2017 dated 03.01.2018. To view the notification,Click Here

2.1.3-Companies (Incorporation) Rules,2014

3. One Person Company.-

(1) Only a natural person who is an Indian citizen and resident in India-

(a) shall be eligible to incorporate a One Person Company;

(b) shall be a nominee for the sole member of a One Person Company.

“ – For the purposes of this rule, the term “resident in India” means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding financial year.

Explanation II.- For the purposes of this rule, while counting the number of days of stay of a director in India for the financial year 2018-2019, any period of stay between 01.01.2018 till the date of notification of this rule shall also be counted”;

Explanation.- For the purposes of this rule, the term “resident in India” means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one calendar year.

(2) No person shall be eligible to incorporate more than a One Person Company or become nominee in more than one such company. 

(3) Where a natural person, being member in One Person Company in accordance with this rule becomes a member in another such Company by virtue of his being a nominee in that One Person Company, such person shall meet the eligibility criteria specified in sub rule (2) within a period of one hundred and eighty days.

(4) No minor shall become member or nominee of the One Person Company or can hold share with beneficial interest.

(5) Such Company cannot be incorporated or converted into a company under section 8 of the Act.

(6) Such Company cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporates.

(7) No such company can convert voluntarily into any kind of company unless two years have expired from the date of incorporation of One Person Company, except threshold limit (paid up share capital) is increased beyond fifty lakh rupees or its average annual turnover during the relevant period exceeds two crore rupees.

Substituted vide Companies (Incorporation) Third Amendment Rules, 2018 dated 27.07.2018. To view the Notification, Click Here
substituted vide  notification dated 27.07.2016,  Companies (Incorporation) Third Amendment Rules, 2016. To view the notification,Click Here

2.1.4-Companies (Incorporation) Rules,2014

4. Nomination by the subscriber or member of One Person Company.-

For the purposes of first proviso to sub-section (1) of section 3-

(1) The subscriber to the memorandum of a One Person Company shall nominate a person, after obtaining prior written consent of such person, who shall, in the event of the subscriber’s death or his incapacity to contract, become the member of that One Person Company.

(2) The name of the person nominated under sub-rule (1) shall be mentioned in the memorandum of One Person Company and such nomination in  along with consent of such nominee obtained in and fee as provided in the Companies (Registration offices and fees) Rules, 2014 shall be filed with the Registrar at the time of incorporation of the company along with its memorandum and articles.

(3) The person nominated by the subscriber or member of a One Person Company may, withdraw his consent by giving a notice in writing to such sole member and to the One Person Company:

Provided that the sole member shall nominate another person as nominee within fifteen days of the receipt of the notice of withdrawal and shall send an intimation of such nomination in writing to the Company, along with the written consent of such other person so nominated in


(4) The company shall within thirty days of receipt of the notice of withdrawal of consent under sub-rule (3) file with the Registrar, a notice of such withdrawal of consent and the intimation of the name of another person nominated by the sole member in  along with fee as provided in the Companies (Registration offices and fees) Rules, 2014 and the written consent of such another person so nominated in

(5) The subscriber or member of a One Person Company may, by intimation in writing to the company, change the name of the person nominated by him at any time for any reason including in case of death or incapacity to contract of nominee and nominate another person after obtaining the prior consent of such another person in

Provided that the company shall, on the receipt of such intimation, file with the Registrar, a notice of such change in  along with fee as provided in the Companies (Registration offices and fees) Rules, 2014 and with the written consent of the new nominee in  within thrity days of receipt of intimation of the change.

(6) Where the sole member of One Person Company ceases to be the member in the event of death or incapacity to contract and his nominee becomes the member of such One Person Company, such new member shall nominate within fifteen days of becoming member, a person who shall in the event of his death or his incapacity to contract become the member of such company, and the company shall file with the Registrar an intimation of such cessation and nomination in  along with the fee as provided in the Companies (Registration offices and fees) Rules, 2014 within thirty days of the change in membership and with the prior written consent of the person so nominated in

To view the return,Click Here
To view the return,Click Here
1. Substituted vide Companies (Incorporation) Fifth Amendment Rules,2016 w.e.f 01.01.2017.

2. Further substituted vide the Companies (Incorporation) Amendment Rules, 2018 w.e.f., 26.01.2018 .To view the notification,Click Here

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2.1.5- Companies (Incorporation) Rules,2014

If One Person Company or any officer of such company contravenes the provisions of these rules, One Person Company or any officer of the One Person Company shall be punishable with fine which may extend to ten thousand rupees and with a further fine which may extend to one thousand rupees for every day after the first during which such contravention continues.

Omitted vide The Companies (Incorporation) Amendment Rules, 2015. To view the notification,Click Here

Commencement Notification dated 09.02.2018


Companies (Incorporation) Amendment Rules, 2015 [GSR 349(E)] dated 01/05/2015


Companies (Incorporation) Third Amendment Rules, [GSR 743(E)] dated 27/07/2016


Enforcement Notification S.O. 902(E) dated 26/03/2014


Exemption to Specified IFSC Private company [GSR 09(E)] dated 04/01/2017


Exemption to Specified IFSC Public company [GSR 08(E)] dated 04/01/2017


The Companies (Amendment) Act, 2017 (Effective from 03.01.2018)


FORM NO. INC.2 One Person Company- Application for Incorporation (Omitted w.e.f 01.01.2017)


FORM NO. INC.3 One Person Company – Nominee Consent Form


FORM NO. INC.4 One Person Company – Change in Member/ Nominee


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