One person company is a new concept in India, which has been introduced by the companies’ act 2013. In the old Companies act 1956 a minimum of two directors and shareholders were required to form a private limited company. However, in case of a One person company, only 1 person is required who can be a shareholder as well as the Director. Hence the name, One Person Company. The concept opens up spectacular possibilities for sole proprietors and entrepreneur who can take the advantages of Limited liability and corporatization, but were held back in doing so because of the requirements of finding a second director or second shareholder.This is the fundamental concept of a One Person Company. In fact, One Person Company is defined in the Companies Act as a Company which has only one member. A single shareholder holds 100 percent shareholding. The thing to be kept in mind is that the Company Incorporation Rules provide that only a natural person who is a resident of India and also a citizen of India can form a one person company. It means that other legal entities like companies or societies or other corporate entities cannot form a one person company. Further it also means that Non resident Indians or Foreign citizens cannot form a one person company. Further the rules also specify that a person can be a shareholder in only one one person company at any given time. It simply means an individual cannot have two different one person companies in his name.