CONVERSION OF PRIVATE LIMITED COMPANY TO ONE PERSON COMPANY




Legal Suvidha Providers can help you convert Private limited Company to One Person Company easily.



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CONVERSION OF PRIVATE LIMITED COMPANY TO ONE PERSON COMPANY

Definition Advantages Procedure Documents FAQs


CONVERSION OF PRIVATE LIMITED COMPANY TO ONE PERSON COMPANY


A private limited company can convert itself into a one-person company (OPC) if it has a paid-up capital of less than Rs. 50 lakh and an annual turnover of less than Rs.2 crore.

One Person Company is a business entity run by a sole owner with the benefit of limited liability as that of Private Limited Company.In addition to this, One Person Company is a separate legal entity from its members, offering protection to its shareholders and can be formed by only one director.





Advantages of One Person Company



SINGLE OWNER There is only one owner who can act both as a shareholder as well as the director.
LIMITS DIRECTOR'S LIABILITY Businesses often need to borrow money. In structures such as the Sole Proprietorship, proprietors are personally liable for all this debt. So if it cannot be repaid by the business, the proprietor would have to sell his/her car, house or jewellery to do so. In an OPC, only the amount invested in starting the business would be lost; all personal property would be safe.
CONTINOUS EXISTENCE If a promoter were to operate as a Sole Proprietorship, rather than an OPC, the business would come to an end on his/her death. As an OPC has a separate legal identity, it would pass on to the nominee director and, therefore, continue to exist.
EASY COMPLIANCES OPC is one of the easiest forms of corporate entities to manage. Very few ROC filing is to be filed with the Registrar of Companies (ROC). No need to conduct Annual General Meeting (AGM), so lesser compliance cost.




Procedure to Convert Private Ltd to OPC




1

Preparation of Documents

2

Filing of Documents

3

Conversion to One Person Company













A Board meeting of director needs to conducted and a notice will be prepared and a date for the extraordinary general meeting (EGM) will be decided. During this time, we'll complete all the formalities, from filing conversion forms to alteration of your Memorandum & Articles of Association.




Documents Required for Conversion






List of all members and creditors


Latest balance sheet


Letter of ‘No Objection’ from the members and creditors


Letter of Consent from the Directors by way of affidavit


Notice of Extra General Meeting (EGM), which is held to gain the approval of Directors for the conversion of the Private Limited Company to One Person Company.


Certified true copy of Special Resolution


Altered Memorandum of Association


Altered Articles of Association


Certified true copy of Board Resolution is optional




Frequently Asked Questions





Can an OPC be converted into any other Company?
One Person Company cannot be converted to into any other kind of Company until after two years from the date of incorporation of the OPC. However, in case the capital increases beyond Rs.50 lakhs or the annual average turnover exceeds Rs.2 crores. The OPC will cease to exist and then it must be converted to Private Limited Company within a period of six months.

Can a Private Limited Company convert itself into One Person Company?
A Private Limited Company cannot convert itself into a One Person Company until the capital is more than Rs.50 lakhs or annual turnover is more than Rs.2 crores in the relevant amount of time.

What are the formalities after Private Limited Company is converted into One Person Company?
The following steps must be taken care of after the conversion:

• Arrange a new PAN card for the company
• Update Company account details
• Make the necessary changes in Altered Memorandum and Articles of Association







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