Private Limited to One Person Company
A private limited company can convert itself into a one-person company (OPC) if it has a paid-up capital ofless than Rs. 50 lakh and an annual turnover of less than Rs.2 crore. An OPC also need a nominee. The procedure is time-consuming, as you cannot use the INC-29 procedure, but should be completed inside 25 working days. Our package includes everything from the filing of the forms for conversion to the alteration of your Memorandum of Association and Articles of Association.
Advantages of One Person Company
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.
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.
An OPC can only have one director and shareholder, so annual filings are much reduced, as is work relating to share certificates and the statutory registers.