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Private Limited Company to OPC


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Online Private Limited Company to OPC Starts at Rs. 9887.00 / -
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About Private Limited Company to OPC

The conversion of a private limited into an OPC (One Person Company) is allowed as per the Companies Act, 2013, which provides a mechanism to convert one class of company into another. Section 18 of the Act, explicitly provides for the conversion of an already registered private limited company with effect from 1-4-2014. Therefore, a private limited company can be converted into the one-person company by the procedures prescribed under the Act and the rules.

Benefits

Limited Liability

There may be various unforeseen events, beyond our control, during the course of business which can destroy the entire business and put personal assets of the proprietor at risk, in case form of business is proprietor ship business. However, in case of a One Person Private Limited Company, the liability of a shareholder is limited to the extent of his/her shareholding in the Company. As per corporate form of business any business loss will not affect personal property of the owner and it will be the Company which will bear the entire loss.

Legal status with complete control

Companies Act 2013 recognized the concept of One Person Company as a Private Limited business structure. As we all are aware that company form of business is a widely used business form and creates a confidences in parties doing business with the company. It is a simple fact to understand that any dealer, suppliers or customers feel more comfortable to deal with private limited companies as compare to proprietorship firm. One of the major advantages One Person Private Limited Company business form is that here owner is one person who can take quick decisions w.r.t. the business of the Company and enjoy complete control.

Easy Banking Operations

Banks also prefer companies for providing their services rather than proprietorship firm. It is comparatively easy for One Person Companies to get loan from banks rather than proprietorship firm. In short we can say that One Person Company is a successful substitute of proprietorship business.

Taxation relaxation

Companies Act 2013, have given ample powers to One Person Company to run its business as a Company and enter into valid business contract with customers and management. Thus all the provisions of tax planning are available to a One Person Company. 5. Less Compliance and Management After above mentioned points one can easily understand that the concept of One Person Company form of business is the easiest forms of business to manage. It is easy to manage compliances of One Person Company as they are less in comparison to routine Public or Private Company business.

Minimum Requirements

  • That the paid-up capital of the company is less than Rs. 50 Lacs
  • That the annual turnover of the company must be less than Rs. 2 crores during the past three consecutive financial years. In case the company is new and have not completed three years, then the turnover shall be reckoned from the date of its incorporation.
  • That the shareholder of the resulting OPC shall be only one Natural Individual having Indian nationality.
  • The directors of the company shall give a declaration by way of affidavit duly sworn in confirming that all members and creditors of the company have given their consent for conversion, the paid up share capital company is fifty lakhs rupees or less or average annual turnover is less than two crores rupees, as the case may be;
  • The list of members and list of creditors;
  • The latest Audited Balance Sheet and the Profit and Loss Account; and
  • That the shareholder of the OPC must be a resident person, a person becomes a resident if he stays for 180 days in India during immediately preceding one calendar year.
  • The shareholder of the Resulting OPC must not have incorporated any other OPC, or he is not a nominee of any other OPC.
  • A minor cannot be a member or nominee of an OPC
    The conversion of the private limited company into OPC shall not affect the liabilities, and contractual obligations entered, by the company before conversion & such debts, liabilities, obligations shall be enforceable in law as if no such conversion has taken place and the resulting OPC shall be liable for them.

Documents Required

The directors of the company shall give a declaration by way of affidavit duly sworn in confirming that all members and creditors of the company have given their consent for conversion, the paid up share capital company is fifty lakhs rupees or less or average annual turnover is less than two crores rupees, as the case may be;

The list of members and list of creditors;

The latest Audited Balance Sheet and the Profit and Loss Account; and

The copy of No Objection letter of secured creditors.

Process

Frequently Asked Questions

No, FDI is not allowed for One Person Company, if it is, then it will lose its One Person Company status.

No, the Act clearly states that, the nominee should also be an Indian resident citizen.

As per the Act, Nominee of one OPC, cannot be a nominee of another OPC. In this event, the Nominee has to withdraw his membership from either of the OPCs within one hundred and eighty days.

As per the Act, the average annual turnover during the relevant period should not exceed Rs.2 Crores. If it exceeds, then the company automatically get converted to a Private Limited Company.

The Act has not made any restriction for a One Person Company to become a member of another Private Limited Company.

  • The paid up capital should not exceed Rs. 50 Lakhs
  • Average annual turnover of the private company for three years should not exceed Rs.2 Crore.
  • Obtain NOC from members and creditors of the Private Limited Company
  • Pass a Special Resolution for conversion
  • File Special Resolution in Form No. MGT.14 with ROC
  • File fees and application in Form No. INC.6 and supporting documents with ROC
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