Under the Companies Act 2013, you can convert a Private Limited Company into OPC (One Person Company).
The conversion of PLC (Private limited company) into an OPC (One Person Company) is provided as per the Companies Act, 2013, which implements a mechanism to convert one class of company into another. Section 18 of the Act, explicitly grants the conversion of an already registered private limited company starting from 1 April 2014.
The conversion of PLC to OPC would not affect the responsibilities and contractual obligations of the company before conversion, and such claims, liabilities, obligations shall be enforceable by law, and the resulting OPC shall be liable for them.
Limits Director's Liability
Businesses often need to borrow money. With sole proprietorships, proprietors are personally liable for all the 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 with his/her death. Since an OPC has a separate legal identity, it will pass on to the nominee director and, therefore, continue to exist.
An OPC can only have one director and one shareholder, so annual filings are limited to share certificates and statutory registers.
Here are some requirements to be followed to convert the private limited company into a one-person company:
A private limited company can be changed into the one-person company based on the following provisions:
Gather a board meeting
Issue notice of EGM
No objection form all creditors
Conduct of EGM
Filing of resolution with the ROC
The issue of the certificate of conversion
The application of the conversion of private limited company into a one-person company is filed using Form-INC-6 with the following statements.
We execute legal work for over 1000 companies and LLPs every month, by leveraging our tech capabilities, and the expertise of our team of legal professionals. Come on board and experience the ease and convenience!
By handling all the paperwork, we ensure a seamless interactive process with the government. We provide clarity on the incorporation process to set realistic expectations.
With a team of over 300 experienced business advisors and legal professionals, you are just a phone call away from the best in legal services.
08-May-2020: Jio Platform Gets Another Investment Boost from the U.S.
In a statement released today, the Reliance Industries Limited (RIL) has said that Vista Equity, a US-based firm has acquired a 2.32 % stake in Jio platforms. Experts are saying that this will strengthen RIL’s status as a ‘next-gen’ software platform.
10-Mar-2020: GST, ESIC, PT and EPFO Registration to be Integrated on MCA portal
Registration of new private limited companies and OPCs under EPFO, GST, ESIC, and Professional Tax can now be done on the MCA portal, along with company incorporation itself. However, the companies will need to comply with the provisions of the ESI Act, EPF Act, and MP Act.