Convert One Person Company to Private Limited Company in India
OPC and PLC
One Person Company (OPC) is a business entity run by a sole owner with the benefit of limited liability.One Person Company is a separate legal entity from its members, offering protection to its shareholders. Every One Person Company must nominate a member for the Directorial position in the MoA and AoA in the absence of the prime director.
A Private Limited Company, or LTD or PLC, is a privately-held company. This implies that the business limits owner liability to its shares and limits the number of shareholders to 50. It also restricts shareholders from trading shares publicly.
Advantages of a Private Limited Company (PLC)
Limited Liability
The liability of shareholders is limited to their shares. Financial risks are a part of the business, but minimizing them and sustaining the business's progress is imperative. In an LTD, if due for any reason, the company were to be shut down, the shareholders would not risk losing their personal assets.
Minimized Takeover Risks
The risk of takeovers is minimized when two shareholders trade shares, as the selling and buying of shares are possible only when both parties have given their consent.
Incorporated Entity
Private limited companies are incorporated. Hence it continues to exist even if the owner dies.
Ease in Capital Raising
The capital or options of raising business investment is not restricted to one person, which is the case in One Person Company.
No Taxes on Dividends
Private Limited Companies pay corporate tax on their profits. Dividends that the shareholders receive are not taxed. Taxes are determined as per their personal income tax rate.
Hiring Qualified Personnel
Private limited companies can attract high-caliber employees that greatly help the company's growth.