One Person Company: One Person Company is a new of concept of business that is recognized by Companies Act 2013 in comparison to Private Company. One Person Company (OPC), as a name suggest, can be registered with a single person as a member. Only one Director cum shareholder required for formation of One Person Company. One person company provide more advantages such as Limited Liability, legal Status and Corporate Identity, Quick Decision Making, Flexible in Management, easy bank operation, reduced taxation burdens.
Conversion: A One Person company can be easily managed with less compliance to be followed, conversion of Sole Proprietor firm or Partnership or Private Limited Company to One Person Company would benefit most people.
Private company into a One Person Company
Procedure for conversion of the Private company into a One Person Company:
The procedure for conversion of the private company into a One Person company is regulated by Rule 7 of companies incorporation rules, 2014.
1. A private company other than a company registered under Section 8 companies Act 2013, who has a share capital of 50 lakhs rupees or those having an average annual turnover is 2 crore rupees during the relevant period, may convert their private company into one person company.
2. This Conversion shall be in accordance with Rule 7 of Companies (Incorporation) Rules, 2014.
3. The company shall obtain a NO objection in writing from existing members and creditors when passing a special resolution in the general meeting.
4. The company is required to file Special Resolution passed by shareholders for Conversion of Private Company into One Person Company (OPC) with concerned Registrar of Companies. Hence, file form MGT.14 within 30 days of the passing of Special Resolution with the concerned Registrar of Companies with the documents.
5. The following documents should be attached along with fees:
- The directors of the company shall give a declaration by way of affidavit duly sworn in confirming that all members and creditors of the company have given their consent for conversion, the paid up share capital company is fifty lakhs rupees or less or average annual turnover is less than two crores rupees, as the case may be;
- The list of members and list of creditors;
- The latest Audited Balance Sheet and the Profit and Loss Account; and
- The copy of No Objection letter of secured creditors.
6. Concerned Registrar of Companies (ROC) will check the forms and attached documents filed by the Company for Conversion of Private Company into One Person Company (OPC). On being satisfied that Company has complied with prescribed requirements the Registrar of Companies (ROC) shall issue the Certificate to the effect of Conversion of Private Company into One Person Company (OPC).
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