Single member is a type of private company having share capital limited by shares, Single member company has only one owner or it is incorporated with only one member.
LAW AND RULES RELATING TO SINGLE MEMBER COMPANY
SMC rules 2003, deals or manage all the issues relating to the Single Member Company.
The provisions of the Act 2017, and the rules and regulations of this act are applicable on the Single Member Company as in the same manner applicable on the Private Company of two or more than two members.
FORMATION OF SINGLE MEMBER COMPANY
Any person who want to form a SMC, must furnish all the requirements to form a Private Company shall apply to form SMC. Private Company shall also be converted into SMC on Complying with the rules and regulations made thereunder.
The following documents are required to form SMC are as follows:
- Name of Company or Business
- Copy of CNIC of director or CEO or a passport incase of Foreign director or CEO
- Memorandum and Article of Association
- Address of the company
- Capital of SMC
- Power of Attorney
After the Submission of required fee, the relevant CRO (Company Registration Office) takes at least one week to complete the process of registration of SMC.
It is also incumbent on such person to file with the registrar at the time of incorporation a nomination form as indicating at least two individual or persons act as nominee director and alternate nominee director.
CHANGE STATUS OF SINGLE MEMBER COMPANY
A Single Member Company may also convert into Private Company on increase number of its member to more than one due to further allotment of shares or death of single member (transfer of shares) or on operation of Law.
ADVANTAGES OF SINGLE MEMBER COMPANY
- Has a separate legal entity as there is only single owner.
- Liabilty of SMC is limited to the amount invested.
- Lower Corporation tax
- Ownership of SMC easily transfer to another person without too much work
- SMC does not cease incase of death of Single Owner
- Owner of SMC takes decisions independently and receive the full share of distributed profit alone.