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One Person Company
What is One Person Company Meaning ?
One person company as a company which has only one person as a member. This paradigm shifts from the Companies Act 1956, where minimum two members are required float private limited company as well as public company.
For the 1st time the concept of One Man Company or OPC has been introduced in India under Companies Act 2013 and the intent is apparently to permit entrepreneurship of a single individual to obtain the benefit of a corporate form of organization. This concept has opened huge business opportunities for small entrepreneurs.
A single individual forms a company satisfying all the legal requirements of the law for a definite purpose, usually for profit making. It has only one person as a member who will be promoter and director of the company. Hence it is a single shareholder corporate entity, where legal and financial liability is limited to the company only
What is One Person Company Registration ?
Under companies act 1956 minimum two members were required for the formation of Private Limited Company Registration. This was a hindrance to entrepreneurs who wanted to go solo or do business alone. So, the only option available was sole proprietorship firm. The major problem with doing business as a sole proprietorship firm is that it does not have a separate legal entity and has unlimited liability. OPC is a legitimate way to form a company with only one member. It can work like proprietorship, but it holds the status of the company and of course, it enjoys the benefit that comes with it i.e. limited liability. Although an OPC comes under a private company, it has been given many exemptions and thus has a comparatively lesser compliance burden.
The Minimum number of directors is limited to one and only one director can sign the financial statement and the Board’s report