Private Limited to One Person Company

Tax Benefits: An OPC is taxed like any other company, which can provide tax benefits compared to a sole proprietorship. Separate Legal Entity: An OPC is a separate legal entity from its owner, which can improve its credibility and reputation in the market. Limited Liability: As an OPC, the liability of the sole shareholder is limited to the extent of his/her shareholding.

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Conversion of Pvt Ltd to One Person Company

As per the Companies Act, 2013, which establishes a process to change one kind of company into another, a PLC (Private Limited Company) may be converted into an OPC (One Person Company). With effect from 1 April 2014, Section 18 of the Act expressly permits the conversion of an existing private limited company that has already been registered.

The duties and legal commitments of the business before conversion would not change as a result of the PLC becoming an OPC, and the new OPC would be responsible for them. Such claims, liabilities, and obligations would also be legally enforceable.

The organizational framework of a private firm frequently disintegrates when one of its promoters decides to leave his job. The expert in this case proposes that you convert your private limited business to an OPC. An OPC is a type of business structure that can be incorporated with just one stakeholder.

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Benefits of converting Pvt Ltd to One Person Company

Here are the some benefit of converting Pvt Ltd to One Person Company :

No formality for the board meeting

A one-person business is not required to hold board or general meetings.

Greater Business from Ownership

Due to the risks involved in being a sole proprietor, one person companies might draw interested investors.

Is well-known in the market

One Person Companies draw qualified applicants to aid in the expansion of the business because they are comparable to Private Limited Companies.

A single director is necessary

The One Person Company can be formed with just one Director.

Ease in Managements

Management is simpler with a one-person company than with a private limited company.

Offers its Member Limited Liability

By limiting responsibility from personal assets, it protects its shareholders in contrast to a sole proprietorship.

Share Transferability in a Simple Way

Filling up the share transfer form and giving it to the buyer of the shares is all that is necessary to transfer shares in a One Person Company.

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Eligibility Criteria for Converting Pvt Ltd to One Person Company

The following requirements must be met before you are permitted to Private Limited to a One Person Company.

  •  The decision to convert should be approved by all of the directors.
  •  To the extent that you can defend this conversion—which is, to be honest, a downgrade—your net worth should have been severely decreased.
  • Before proceeding with this conversion, you must receive the consent of your creditors.
  •  The directors of your private limited company must certify in an affidavit that they are willing to resign from their positions in order for your firm to be changed to a one-person company.
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Process for Converting Pvt Ltd to One Person Company

The methods below provide a full explanation of how to change a Private Limited Company into a One Person Company model:

Call a Board of Directors EGM

  •  Set up an Extraordinary General Body meeting and invite all of the people who are regularly connected with your private limited company, including members, shareholders, directors, creditors, suppliers, and the majority of them.
  • The Board's letter of consent, which you should get

  • Obtain the directors' permission to begin this conversion by requesting a letter of consent.
  • Take the creditors' NOC

  •  Obtain a "No objection" from the creditors and members of your company.
  • Modify MoA and AoA

  •  Make amendments to the Memorandum of Association and the Articles of Association.
  • Take a look at the consent letter

  • Utilizing the MCA portal, submit the online INC-6 form. When you do, make sure you upload the letters of consent and other necessary paperwork.
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Documents required for converting Pvt Ltd to One Person Company

E-Form MGT 14 The following attachments must be filed with a copy of the Special Resolution at the Registrar of Companies:

  •  Notice of Extra General Meeting (EGM), which was conducted to obtain Directors' consent for the Private Limited Company's conversion to a One Person Company.
  •  Original copy of the Special Resolution
  •  Modified Articles of Association
  •  Articles of Association Modification
  •  It is optional to submit a real certified copy of the Board Resolution.
  • E- Form INC 6 Application for a Private Limited Company to Change to a One Person Company with the Required Attachments:

  •  List of all participants and debtors
  •  Most recent balance sheet
  •  'No Objection' letter from the creditors and members
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Documents Required for Start Company

  •  PAN Card
  • Aadhar Card
  •  Bank account details
  •  Bank statements/ passbook
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Frequently Asked Questions

No, the procedure of forming a company in India is entirely online. You do not need to be physically there at all because you can complete all documents electronically. All the necessary forms and documentation must be digitised and sent to us.

Yes, regardless of its revenue, a private limited firm is required to employ an auditor. In fact, within 30 days of formation, an auditor must be engaged. Given that penalties for non-compliance can reach millions of rupees and possibly result in the blacklisting of directors, compliance is crucial for a private limited business.

The Ministry of Corporate Affairs makes available the company's registration certificate online.