ONE PERSON COMPANY TO PRIVATE LIMITED COMPANY
Growing Business needs people on Board and to look after the management of Business. Entrepreneurs having OPC convert them into Private Company because of their increasing operation and expenses. To convert an OPC into a Private Company your OPC needs to have vintage of 2 years at least and one has to convert its MOA & AOA. ComplyKart is the Industry leader helping Companies to stay complied with passion.
What is One Person Company
The Companies Act, 2013 introduced new concept of One Person Company to support emerging entrepreneurs. Hence, they are encouraged to create a single person economic entity keeping in view limited liability protection. It’s an opportunity for aspiring as a minimum of two members are required for incorporating and maintaining a Private Limited Company and on the other side, and only one person can form OPC. The Registrar of companies provide them status of separate legal entity from its promoter. The promoter also gets limited liability protection so continuity of business carries much flexibility.
What is Private Limited Company
A small private business entity comes under the category of Private Limited Company as per the provisions of the Companies Act, 2013. Only 2 directors can make this company operational in the market. The feature of limited liability of each member saves their personal assets in condition of any financial problem or overdue debt. The management and decision-making process is quite smooth as 2 members’ rational wisdom proves result worthy for increase in production and sales. The death of the any member or desire to exit the company does not affect the existence of company. It enjoys the privilege of perpetual succession despite all obstacles. The credibility of Private Company is greater than any type of entity.
2 Types of Conversion
Voluntary Conversion: OPC convert themselves voluntary to enjoy the benefits of credibility, easy funding and increasing the salesforce. An OPC can be converted in Private Company only after completion of 2 years of its formation.
Compulsory Conversion: An OPC is required to convert itself into Private Company mandatorily when the paid-up capital of OPC is increased by 50 lakh and turnover is increased from 2 crores. It has to follow necessary procedures to convert itself into Private Company.