Conversion of One Person Company into Private Limited Company - Online Process
Conversion of One Person Company into Private Limited Company can open avenues to pursue additional benefits such as fund raising. A One Person Company into Private Limited Company by two ways:
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Conversion of OPC into Pvt Ltd Company starting from Rs.15,000/-
Conversion of One Person Company into Private Limited Company
Conversion of One Person Company into Private Limited Company can open avenues to pursue additional benefits such as fund raising. A One Person Company into Private Limited Company by two ways:
1.Voluntary Basis.
2.Mandatory/Compulsory Basis.
(a) Voluntary Conversion
An OPC cannot convert voluntarily into Private Limited Company unless Two years is expired from the date of incorporation of the OPC. For Conversion an application is made to Central Government after alteration of MOA and AOA of the OPC.
After the Conversion the legal existence, rights and liabilities of the Company remain same. And for fulfil the minimum requirement of Private Limited Company, minimum 2 shareholders and 2 directors must be appointed.
OPC has to communicate voluntary conversion to the ROC in E-Form INC-5 within 60 days.
(b) Mandatory/Compulsory Conversion
This is a condition where you need to convert an OPC to private limited company compulsorily.
It is because an OPC has-
(a) paid up share capital that exceeds Rs. 50 lakhs or
(b) Or its average annual turnover during the relevant period exceeds Rs. 2 crore.
then it is obligatory for anyone to convert. Such company has to compulsorily convert to a private or public limited company within a period of 6 months from the date when-
(a) the paid-up share capital exceeded 50 lakhs rupees or
(b) Or its average annual turnover during the relevant period exceeds Rs. 2 crore.
Process of Conversion:
The conversion is made by just passing a special resolution in the general meeting. It is checked for a No objection certificate in written from the creditors, and the other members before the resolution are passed.
The shareholders of the OPC should hold a General Meeting for passing the resolution for raising the paid-up capital (if needed), no. of shareholders, and appointment of directors for meeting the requirements of the Private Limited Company.
For converting an OPC to a Private Limited Company, there should be at least 2 shareholders and 2 directors.
The concerned ROC should first be communicated through the prescribed method that the OPC is now required for converting itself into a private limited company.
The one-person company shall file copy of the special resolution with the Registrar of Companies within thirty days from the date of passing such resolution in Form No. MGT.14.
The company shall file an application in Form No. INC. 6 within 6 months of mandatory conversion to ROC.
Benefits of Conversion :
01
Easier to Raise FundsRaising funds as a private limited company is a comparatively easy task as it gives an opportunity for raising shares and has many ways to raise funds in the form of private equity and Banks and Financial Institutions.
02
Limited Liability of OwnersThe obligation or debts of the company does not create a charge over the owner’s personal assets. Their liability is limited only to the subscribed capital unpaid by them.
03
Separate Legal ExistenceA Private Limited Company is registered, a legal entity is born in eyes of law, which is separate from its owners and managers. The company can operate in its own name from opening a bank account to own assets and enter into a contract with parties. This also provides the capacity to sue third parties.
How to Conversion of One Person Company into Private Limited Company
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Documents Required For Conversion of One Person Company into Private Limited Company
- PAN CardPAN Card of shareholders and Directors. Foreign nationals must provide a passport.
- Identity ProofVoter ID/ Passport/ Driving License of Shareholders and Directors
- Address ProofTelephone Bill /Electricity Bill/ Latest Bank Account Statement of Shareholders and Directors
- PhotographLatest Passport size photograph of Shareholders and Directors
- Business Address ProofLatest Electricity Bill/ Telephone Bill of the registered office address
- Financial StatementsDuly certified copy of latest audited Finacial Statements
- Incorporation documents of the OPCCertificate of Incorporation, MoA & AoA to be provided
Frequently asked questions on Conversion of One Person Company into Private Limited Company
1.1. Can OPC be converted to Pvt Ltd?
Ans. One Person Company can be converted in to a Private Limited Company according to the provisions of the Companies Act. OPC can be converted in to Private Limited after two years of setup, or even before that if its turnover is more than Rs 2 crore and paid share capital surpasses Rs 50 lakhs in a financial year.
2.Is there any high qualification required to become a director or shareholder in the private limited company?
No, professional or educational qualification is required to become a shareholder in the private limited company. Any individual in the capacity of the person, with the sound of mind, can start a company.
3. Is a foreign entity allowed to be Director or shareholder of the private limited company?
Ans. Yes, any foreign nationals, entity or an NRI can become a director or shareholder of a private limited company in India.
4. What are the forms that are required for Private Limited Company Registration in India?
Ans. . Ministry of Corporate Affairs has introduced a new form called the SPICe INC- 32 forms for the faster company incorporation. Apart from this, to register a private limited company, an e- MOA (INC-33) and e- AOA (INC- 34) are also to be submitted with the above form.
5. Can private limited company invites the general public for shares?
Ans. No, a private limited Company cannot invite the general public top to subscribe to the company shares.
6. How many directors are required for company registration?
A private limited company needs a minimum of 2 directors and a maximum of 15 directors to register a company.
7. Can Private Limited Company has FDI or Foreign direct investment?
Ans. Yes, a private company is allowed to have foreign direct investment in their company.
Following registered persons not required to file GSTR 1, 2 and 3 such as:
Goods and Services Tax (GST) is an indirect tax applicable on the supply of goods and services. It is a comprehensive, multistage, destination based tax. It has subsumed almost all the indirect taxes except a few state taxes. It is collected from point of consumption and not point of origin like previous taxes.
Documents attach in trademark application:-
A trademark can be registered by the Controller General of Patents Designs and Trademarks, Ministry of Commerce and Industry, Government of India under Trademark Act, 1999 to protect the identity of any goods and services.
Some basic information about Income tax
An income tax is a tax imposed on individuals or entities commonly known as taxpayers that varies with respective income or profits. Income tax generally is computed on taxable income which is calculated after various deductions. Taxation rates may vary by type or characteristics of the taxpayer.
Basic Features to Read before starting private limited company
Private company is required to add the word “Private limited” or “Pvt. Ltd.” to end of its name. Private company should have at least two member and two directors. Private company have right to issue debentures to any number of persons.
Features of Public Limited Company
MCA provides the facility for incorporation of public limited company. For incorporation, firstly apply for name through RUN (Reserve Unique Name) on MCA portal. After availability of name from ROC we should file incorporation form i.e. Spice 32, INC 33(for eMOA), INC 34(for eAOA), .