- Proprietorship To Private Limited Company
Convert Proprietorship to OPC
One person company is an improved and better form of a sole proprietorship firm. One person companies are a great business organization structure for medium-sized businesses. One person company is an improved and better form of a sole proprietorship firm and thus conversion of sole proprietorship into One Person Company is a good business decision.
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BENEFITS
OPC Over sole proprietorship
Separate Legal Entity hence limited liability
Protection of the company’s personal assets assures that the owner has limited liability to the extent of his/her own share.
Opens better business avenue's
Large organizations prefer to deal with OPC instead of proprietorship firms. OPC is registered just like a private company and private companies are the trusted form of business which makes it easy for them to get funding from the financial institutions. It gives suppliers and customers a sense of confidence in the business.
An easy to manage structure
The structure of OPC is manageable as there is only one member. There is no requirement to hold an annual or added ordinary general meeting. There is no requirement to wait for anyone’s approval as there is only one person who is the single authority to make decisions.
Here how it works
Convert Proprietorship to OPC
A one-person business is a more developed and superior version of a sole proprietorship organization. For medium-sized firms, one-person organizations provide an excellent company organisation structure. Converting a sole proprietorship into a one-person corporation is a wise business move because it is an improved and better version of a sole proprietorship organization.
- Explore conversion of proprietorship to one person company registration in India
Have Questions? Find Answers Here
The capital requirement of OPC and a private limited company are the same. But, none of this actually needs to be paid-up. This means that you don’t really need to invest any money into the business. The capital should not be more than ₹50 lakh during incorporation.
Once a Company is incorporated, it will be active and in-existence as long as the annual compliance is met regularly. In case, annual compliance is not complied with, the Company will become a Dormant Company and may be struck off from the register after a period of time. A struck-off Company can be revived for a period of up to 20 years.
- An OPC limited by shares must comply with the following requirements:
o Must have a minimum authorized share capital of ₹ 1 Lac.
o Transfer of shares to anyone else is not allowed.
o An OPC is prohibited from giving any invitations to the public to subscribe to the securities of the company. - When the OPC limited by shares or by guarantee, enters into a contract with the sole member of the company who is also the director of the company; the terms of contract or offer must be recorded in writing. Also, the same must be contained in a memorandum or recorded in the minutes of the Board meeting held next after entering into the contact.
- An OPC must inform the Registrar about every contract entered into by the company with the sole member of the company within a period of fifteen days from the date of approval.
To register One Person Company (OPC) in India, acquiring the DSC (Digital Signature Certificate) and DIN (Director Identification Number) by all the directors and Subscriber to MOA (owner) along with the Nominee is mandatory. The Registered Office shall also be in existence for online Private Limited Company Registration.
The promoter of the company should make sure that the proposed name of the OPC for online registration is very unique. Further, all the documents with respect to the Subscriber, Nominee and Directors as well as Registered Office shall be as per the requirement.
To know more about choosing the name for the company, please visit here Mark Business Identity Wisely – Choosing the name of Company
An OPC can be converted into a Private or Public Company only after 2 years from the date of Incorporation.
The requirement to appoint a nominee is prescribed in order to retain the character of Perpetual Existence i.e. Uninterrupted Existence of the One Person Company. A nominee shall be an individual and is to be appointed at the time of incorporation of OPC. In the event of death or incapacity to enter into any contract by existing member, the nominee will become the member of one person company.
The company shall file form INC-4 in case of cessation of member of OPC on account of death, incapacity to contract or change in ownership. In the same form, user needs to provide details of the OPC’s new member.
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