PRACTICE DETAILS
- Lawyer Mr. Shaman Jain
- Skills Compliance
- CATEGORY Compliances
ABOUT THIS PRACTICE
One person company is a refined form of a sole proprietorship firm. Single person companies proves to be an appreciable business organization structure for medium-sized businesses. Since, One person company is an improved form of a sole proprietorship firm, thus, conversion of sole proprietorship into One Person Company is a wise business decision. A private limited company can convert itself into a one-person company (OPC) provided it has a paid-up capital of less than Rs. 50 lakh and an annual turnover of less than Rs.2 crore.
The above business structure provides the single promote full authority over the company and simultaneously, restricting his liabilities to safeguard his personal assets. The owner of this company is a shareholder. Same as a Private Company, OPC may also appoint a distinct individual as director for its management. Appointment of a nominee is compulsory in case of OPC.
Minimum Requirements Needed for Conversion
- In order to convert a private limited company into OPC, you have to get approval from the shareholders’ of private limited company by passing Special Resolution in Extra-ordinary General Meeting. Before passing this resolution, the company must get a No Objection Certificate from existing creditors and members of the company.
- The OPC can have a single shareholder but that shareholder must be a normal person and Indian Citizen.
- The OPC can have up-to 15 directors but a single director also can get the company registered.
- You have to appoint a Nominee in One Person Company via its memorandum and before appointing a nominee it's important to get the consent of the nominee.
- The company must not be listed on any recognised stock exchange.
- In case of a listed company, it will have to wait for atleast one year after the delisting is done.
- DIN (Director Identification Number) for all the Directors.
- DSC (Digital Signature Certificate) for one of the Directors.
Procedure
- You need to conduct a Board meeting with the agenda of converting your private limited company to One Person Company and obtain principle approval of the board.
- Determine date place and time for EGM to get shareholders’ approval by way of Special resolution. And forward notice of the meeting to all members, shareholders, directors, and auditor of the company along with Agenda and detailed Statements.
- Conduct Extra-Ordinary General Meeting on the states date, time and place and pass the required decision.
- Within 30 days of passing the decision file form MGT-14 with the concerned ROC.
- For conversion to One Person Company file an application in form no. INC-6 with imposed fee after enclosing required documents.
- Concerned ROC will check the E-Form and all the attachments and will approve the conversion only after being completely satisfied.
Advantages of One Person Company
- Decision making becomes easier as there is only one person available to make a decision. This significantly speeds up the decision-making process and helps in utilising the surplus time effectively in other productive assignments.
- ROC and annual compliances are lesser for One person company.
- Reduction in work related to annual filing, share certificate etc. for One Person Company.
- One person company is not required to conduct an annual general meeting and there is no requirement for one person company to comply with number of other legal requirements which are compulsory for Private Limited Company.
