A private limited company or famously known as LTD is a privately held company. This implies that the business limits owner liability to its shares and limits number of shareholders to 50. It also restricts shareholders from trading shares publicly.
One Person Company 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/AOA, in case of absence of the prime Director.
Advantages of One Person Company
Similar to Private Limited Company and unlike Sole Proprietorship, OPC allows limited liabilities.
Documents required to convert Private Limited Company to One Person Company
1. E-Form MGT 14 – Copy of the Special Resolution is needed to be filed with Registrar of Companies with the following attachments:
2. E-Form INC 6 – Application for the conversion of Private Limited Company to One Person Company with the following necessary attachments:
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.
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.
The following steps must be taken care of after the conversion:
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