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How To?

How to Incorporate a One Person Company

A One-Person Company gives a great opportunity to the young and budding entrepreneur, or the sole proprietors, to uplift their business and get benefits, under the vast umbrella of Company Law. It is a one-man-show. This concept was prevalent in European countries but has been lately introduced in India.

By: Anshika Singh (Intern) LLB Hons. V sem, 3rd year, PIMR, Department Of Law.

Introduction to OPC:

OPC i.e., One person company, from the name itself suggests that it is a one-person company, i.e. minimum requirement for its member or director is only one. This concept is derived or extracted from the concept of a sole proprietorship. Both the concepts are similar but there are a few points of differences between them. One person company came into the act on the recommendation of, JJ Irani Committee[1] to accelerate the growth of entrepreneurs in the country and to provide for a simple structure for a single person to be registered under the companies act, 2013.

OPC as a company consists of all the essential features of a company that are provided under the Indian Companies Act, 2013, it is a separate legal entity having perpetual succession. Under the companies act 2013, section 2 (62), define one person company as; One person company means a company which has only one person as a member. OPC is also a private company, as per section 3 (1) (c), of Companies Act 2013, but there are some benefits & exemptions given to one person company, as it is difficult for a single member to follow all the mandatory compliance of the private limited company.

In an OPC it is an essential condition that the member or nominee shall have;

1.   To be a resident of India i.e., he must have stayed in India for 182 days.

2.   Shall be nominee for the sole member of OPC.

Only a natural person is eligible to incorporate an OPC. A minor cannot become a member or nominee of OPC. One person company cannot be converted or Incorporated into a company with charitable objects under section 8 of the Indian Companies Act 2013.

The process of incorporation of OPC is very easy. One person company, like any other company must have, at least one board meeting in each half of the calendar year and should maintain proper books of account. Statutory audit of financial statement must be done in an OPC. The company cannot convert itself into a private or public company until 2 years have elapsed from the date of its Incorporation.

Procedure/stages of incorporation of OPC:

1. Obtain DIN:

DIN stands for Director Identification Number. It is an 8-digit number which the sole director gets from the ministry of corporate affairs. Application in Form No. DIR 3 is filed on the MCA portal. After that the application is processed and approved by central govt. through its regional officer.

2. Acquire digital signature:

A person in order to incorporate a one-person company has to acquire digital signature to ensure the security and authenticity and it is also required for the document in electronic form. Electronic signatures are defined under the IT act, 2000.

3. Availability for adoption of name:

The third step involves the sole shareholder or director to apply for the name of the company. The name should not be desirable and should not consist of any impression of state government Central government or any government and it should not be identical or resemble to existing company if a person fails to adopt the name between 15 days and the time-lapse is within 60 days he can file a new application for adoption. The proposed name of the company shall at the end have ‘OPC Private limited’ or ‘Private limited OPC’. The application for name is given in Form No. INC 1 to the registrar of company (ROC).

4. Nominee shareholder:

During the incorporation process the subscriber to the memorandum of one person company with his written consent shall nominate a person to become the member of company in case of subscriber’s death or his incapacity to contract. Consent of such nominee is obtained in form number INC 3 and shall be attached in form no. INC 2. A person cannot be a nominee for more than one OPC.

5. Drafting and printing of MOA and AOA:

Memorandum of association is for the external use and article of association is for the internal purpose of the company. Both are to be drafted carefully and then registered with ROC along with other forms and document. Memorandum of Association shall consist of name, address, description and occupation, etc. signed by its subscriber in the presence of at least one witness. The document consists of affidavits consent letter certificate of compliance from a practicing professional inform number INC 8, etc. MOA and AOA are then finalized through prints, stamps and signatures.

6. Filing of incorporation forms on MCA portal:

In this stage of incorporation the forms and documents are filed on the MCA portal with the registrar of companies. The documents such as:

· Declaration by professionals

· Affidavits

· Address of correspondence

· Consent to act as director in form DIR 2

· Particulars of directors such documents such as driving license passport voter ID bank statement etc, important for the purpose of incorporation.

· Signed MOA and AOA by subscribers.

· Particulars of interest.

· Power of Attorney, which is executed by the subscribers and proposed directors.

In brief, Form No. INC-2 and Form No. INC-3[2] shall be attached, which in itself consists of the above particulars /information. Not only these, but there can be a requirement of a few more documents by the registrar for the purpose of filing application of incorporation.

7. Clarification /additional information required by ROC and payment of registration fee:

After filing the documents for incorporation if the officer at register of company required any clarification/ additional information, it must be filed. After this the payment of registration fees required by ROC is done.

8. Certificate of incorporation:

The certificate of incorporation shall be issued by ROC, in form No. INC-11, after all the requirements are fulfilled. It is of 21 digits consisting of alphabets and numbers which is a conclusive evidence of incorporation of a company.

Conclusion:

A one-person company is a one-man show. The concept of one person company India has done well and gave input in the economic growth of the country. The procedural requirements are very long but it provides a nonabusive process and immunities from various risks, and helps the small entrepreneurs to contribute in economy and compete with the other types of companies, which did not happen earlier. The registration or incorporation give access to credit and loan facilities.

Due to its single membership it gives a person power to run the business according to his will and to take decisions solely in any respect. One person company gives Monopoly in Management. But few concepts like, Where the paid-up share capital of an OPC exceeds 50 lakh rupees or its average annual turnover exceeds during the relevant period exceeds 2 crore rupees, then it ceases to be entitled as OPC and has to mandatorily convert into private or public company[3]. The OPC structure is at its infancy, currently. Artificial legal persons should be allowed to incorporate OPC which shall provide statutory recognition to wholly-owned subsidiaries. The one person one company rule may be dropped. A provision to mention name of alternative person who can satisfy the queries of general public and registrar may be provided in case sole owner remains absent from registered office of the company.

End Notes:

[1] See  JJ Irani committee report, Para 6, Chapter III, Classification of Companies and Registration, 23-Irani committee report of the expert committee on Company law,2005

[2] How to incorporate an OPC, FAQ on OPC, Ministry of corporate affairs, http://www.mca.gov.in/MinistryV2/classification+and+registration+of+companies.html

[3] CS Preethi, Cons of OPC,  All About One Person Companies , January 2020, https:/taxguru.in.companylaw

How To?

How to File a Partition Suit in India

In India, many families and extended families get entangled in cases concerning how property needs to be shared or distributed and if the legal heirs have a right in the property. These land disputes are complicated and litigation often takes years.

By Durga Girish, 4th year BBA LLB, IFIM Law School

According to the partition laws in India, only two kinds of property can be partitioned by the voluntary acts of the owners:

  • Self-acquired property
  • Ancestral property 

A partition is filed when a legal notice goes disregarded. Any person who is a legal heir or co-owner of the joint property, who possesses any legal document (will, gift deed, sale deed) can file a suit for partition and claim his share in the property.

It is recommended to collect any certified documents of the property such as the market value and death certificates from the concerned authorities.

Documents required to file A Partition Suit:

The following documents are needed to file a partition suit for family property partition in India:

  1. Certified copy of original title deed of properties which you are claiming as ancestral properties.
  2. Description of property (area, location with survey numbers, boundaries, etc.) 
  3. Legal heir certificate, if any.
  4. Valuation of the property done by the Sub-Registrar.
  5. Any other supporting documents.

The above-mentioned documents may differ according to the case, so it is best to consult a good family lawyer to know which documents to collect.

The Procedure of Filing Partition suit in India

Article 65 of The Limitation Act 1963 has prescribed 12 years within which a person may file a suit for partition. In any case, a specific procedure needs to be followed while at the time of filing to avoid its dismissal on any grounds. It involves the following steps which are discussed as follows:
1. Filing of the suit/plaint: A plaint is a written formal complaint made by the plaintiff expressing his grievances, claims as well as the cause of action to the court of law. It should be filed within the period prescribed under The Limitation Act of 1963 or it may become time-barred. 

The document must contain the following information: 

  • Name of the court 
  • Name, description, and address the parties
  • Facts that determine the jurisdiction of the court
  • Facts that constitute the cause of action
  • Description of the property
  • Amount of relief claimed by the aggrieved party
  • Statement of the value of the property or subject matter of the suit
  • A declaration stating that the complaint filed is genuine. 

2. Vakalatnama/ Vakil Patra: Vakalatnama is a written document that authorizes an advocate to act and represent matters before any court, tribunal, or authority on behalf of his or her client. This document is usually authorized by an aggrieved person or by anyone who holds the power of attorney for the aggrieved person or represents him in business or trade under that jurisdiction. 


Essentially a Valakatnama should contain the following terms and conditions:

  • The advocate must not be held liable for any decision made by the court.
  • The client must bear all the expenses and costs of the court proceedings.
  • The advocate may retain all the documents until the complete fee amount is paid.

3. Court Fee: Payment of the court fee and processing fee is compulsory for filing any kind of suit. Generally, a nominal court fee of Rs 200 is applicable in case of joint property. After the payment has been made the court will mention the date of the first hearing to the plaintiff and decide whether to continue with the proceedings or not.

4. Hearing of the Case: On the first day of the hearing, if the court believes there are any merits in the case, it will issue a notice to the defendants to submit their arguments and fix another date of hearing. The plaintiff will then have to file the appropriate amount of procedure fee in the court and two copies of the plaint for each defendant within 7 days. 

5. Submission of Written Statement: The defendant must keep a record of his written statements denying the allegations made in the plaint otherwise those allegations will be deemed to be accepted. Apart from this, the defendant must also provide a declaration stating that the contents of the written statement are true to his knowledge. The period for filing a written statement is 30 days and may be extended to 90 days if the court agrees.

6. Replication by the Plaintiff: Replication is a reply filed by the plaintiff against the written statement of the defendant denying all the allegations made by them. Once, the replication has been filed, the pleadings are considered to be complete.

7. Filing of other documents: After the completion of the pleadings, both the parties in the case are allowed to submit and file the original documents to support their respective claims. Only the documents that are submitted by the parties are recorded by the court and a photocopy of the same must be presented to the opposite party.

8. Framing of Issues: Issues are framed by the court based on the arguments and examination of witnesses that have taken place.

9. List of Witnesses: All the witnesses of both parties should be presented in the court. They will be thoroughly examined after which the date for the final hearing is fixed.

10. Final hearing: On the day of the final hearing, arguments will take place between both the parties on the issues framed by the court after which a final order is passed.

11. Certified copy of Order: The court will provide the parties with a certified copy of the order having the seal and stamp of the court. It is useful in case of filing an appeal or in the execution of the order.

The procedure of partition in India is a very lengthy and complicated one. You will find yourself running from one authority to another for retrieving the concerned documents. Hence, it is recommended that you hire a good and reputed family lawyer to make it a less painful process. 

How To?

How to research a legal problem?

For a law student, knowing the tacts and tricks for researching a legal problem is very essential. In this modern era, one needs to work smarter and not harder. Most of the law students after getting a legal problem start googling it, but it is not how it works. 

By: Himanshi jain, student of Final year LL.B. , Balaji Law College, Pune

Here is how one needs to research a legal problem:

Analyze the legal problem 

Read the whole case thoroughly. Get a clear picture in your mind about what you need. Get answers to questions like – Who, What, Where, How? Like who are the parties involved in the case, is the location important, and if yes then what is the location and why it is important? Objects may also be important especially in a criminal case. Think about what general areas of laws are involved? Know that which court has jurisdiction. Then, put all the data in chronological order. 

 Solution 

 Try to come up with a solution to the problem. Evaluate the legal remedy. Think about how your client will be entitled to the relief sought. Then think about the legal issues involved.

Prepare a basic research plan 

Always keep a deadline. Divide your work further into smaller tasks.

Raw materials 

Keep bookmark tags, a notepad, and a pencil. This would be of great help.

Starting your research 

 Prepare a proper plan for your work. Planning is important but it should not take much time. More time should be given to implementing what you plan. After it, you will have a clear idea of what you want to search and you will also have a plan ready to start the work. 

The legislature, executive, and judiciary 

Consider which of the three groups may have established the law on this issue, the legislature, the courts, or the executive branch. It is possible that all three groups have touched the topic. Then look for the case, statute, or regulation that applies. 

Primary sources 

Find out applicable statutes and their relevant sections. Read all sections relevant to your case. Read the explanations and illustrations under those sections and also the exceptions given to those provisions. 

Secondary sources 

Read commentaries, judgments, and research papers, rules, and regulations. Bare acts may be complicated to understand, especially for beginners. Start with commentaries. Secondary sources are easier to read and understand than the primary sources. So, after reading specific portions from some secondary sources you will surely get some clarity which will help you understand and interpret the law. 

While reading commentaries you will also get the case laws relevant to your legal problem and make a note of them. Don’t keep on jumping from one source to another at the same time. This will lead to confusion. Take some time and read one source at a time, then look for some other source. While reading judgments be sure that, you are reading cases that explain statutory provisions in relation to your case only. Here are few points which you must remember while reading case laws :

  • Headnotes – Read the Headnotes, this part is very useful to skim through the judgment as judgments are usually lengthy and it may take a lot of your time if you keep on reading them.
  • Compare facts – Look at the facts of that case and compare it with your problem. 
  • Area of law – Determine, how the area of law is related to your problem. 
  • Review the current law – Review the current state of law. Make sure that they are not amended or repealed. 
  • Case laws (supportive) – support your proposition with your case laws. 
  • Case laws (opposition) – Check out case laws which oppose your preposition. 

After that do a reading of what you have written and discard irrelevant stuff. The secondary reading may help you get you some point which you would have missed in your reading for the first time. 

Notes 

Making notes is very essential. Don’t forget to make notes while doing all. If you don’t make proper notes then you may forget what you have researched.

Time to stop 

Research is never going to end. You may keep on finding new sources, keep digging in different books and websites. After going through the process above, you will surely get sufficient information. So, stick to your plan and deadline you had set earlier. Make sure to recheck all the points from the notes of your research, before presenting.

How To?

How to fully utilize Manupatra?

By: Ankita Sharma, Faculty of Law, University of Delhi

What is Manupatra?

Manupatra is India’s premier online research service for the legal community.

Who can use this?

Manupatra enables legal professionals to retrieve cases, statutes, and other documents from Manupatra’s vast library of legal and business materials.

Search Methods

Manu Search

·  This interface provides you with a single search box experience and helps you to search using keywords, phrases, multiple phrases, and more.

·  You can type your question and the search engine uses algorithms to give results based on relevancy.

Legal Search

Manupatra has divided laws into various fields. This search will assist you in search for specific Judgments/cases.

•  Advance Search-

a. Search for cases by selecting “Act / Statute”

b. Searching for cases by “Appellant/Respondent Name”

c. Search By judges’ name

•  Citation Search

Indian Citation (Indian Journals & Publications)

International Citation (International Journals & Publications)

a. Search for cases with Citation. To get a unique result, specify all components of the publisher’s citation

Miscellaneous Searches

a. Searching for Judgments under Bare Act / Statute (Digest)- This allows viewership to all such case laws that have a reference to statutory provision of statutes / Acts.

b. Searching for Case laws by Case Number

c. Filter Results- Through this feature, the search results are further filtered/categorized by Manupatra under various heads making navigation easy for the user.

The results are filtered/categorized under heads such as Court, Document Type, Keyword, Subject, Judge, Ministry, Period, etc. In one glance a user can know how the results are slotted across different heads and straight away access the one that is relevant to his research.

Manu Instant

This gives a view of editorial enhancements in the judgments. You can view fields like Case Note (based on which a user may decide to read the full text), cases referred with appropriate reference, equivalent citations, citing reference, etc.

Query Definition

It shows the definition of the query words/phrases.

Take the mouse over the search word appearing as “You have searched for:” You can see the dictionary meaning in a pop-pup.

Manu Cite

A gear-like icon Settings is there, which when clicked displays the number of times the judgment has been cited in other judgments.

Citing Reference Graph

This feature will assist you in knowing as to in what perspective cases mentioned in a particular judgment were treated or considered by the Court delivering judgment.

Timeline

This feature will give you quick information on the number of verdicts passed and as available in Manupatra database with the help of graphical representation. This feature will help the researcher/ user to form a statistical opinion on prevailing prominence of a legal issue during a particular year range vis-a-vis verdict passed by the respective Courts, Tribunals and Commissions, Notifications as covered in Manupatra database.

Manupatra is the extensive and comprehensive legal database through which one can search for various results such as

·  Judgments/Orders (Supreme Court, High Court, and Tribunal)  

·  Central Rules.

·  Central and State Acts.

·  Notifications and Circulars of Various Central Ministries.

·  Pending bills in Parliament

·  Commentaries and Various Treaties, etc

Endnotes

referred Manupatra http://www.manupatrafast.com/Default/OnlineManual.aspx

How To?

How to Draft an Affidavit?

Affidavits are self-declaring written statements that are sworn or affirmed before relevant officials who have the power to administer an oath. They can be used as evidence in courts and the production of a false affidavit is a punishable offense.

By: Anusha R, 3rd Year B.A., L.L.B, Ramaiah Institute of Legal Studies

What is an affidavit?

An affidavit is a legal document containing facts accompanied by an oath. Merriam Webster Dictionary describes an Affidavit as

‘a sworn statement in writing made especially under oath or on affirmation before an authorized magistrate or officer.’ 

When is an affidavit used?

  • Affidavit for change in name.
  • Affidavit for identity theft
  • Affidavit for divorce
  • Affidavit for custody of a child
  • Affidavit for a birth certificate
  • Affidavit for a death certificate
  • Affidavit for loss of Marks card or such other documents. 

How to draft an Affidavit?

  • Title the affidavit and include a caption- Affidavits are usually started with a title. This must briefly state what the affidavit is about. For example, “Affidavit of,” followed by your name. 

In the caption, include the name and location of the court.

If there’s a court case involved, include the case title, the names of the defendant(s) and the plaintiff(s), and the case number.

  • Introduce the affiant- The next section after the title and caption is a statement of the affiant’s identity. State your name, age, gender, occupation, place of residence, and relationship to the litigant.
  • Statement of Facts- Mention all the facts clearly and in simple language. The statements mentioned must be true.   
  • Sworn confirmation of facts- Following the facts, a statement confirming the facts is mandatory to be added. It acts as an oath to the court.
  • Additional documents- Additional documents, if any, must be attached towards the end of the affidavit, properly numbered and titled.
  • Signatures of the advocate and the affiant- Both the advocate and the affiant are to sign the document.
  • Notarized- The affidavit must then be notarized by a notary public or the Oath Commission.

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