Introduction

One Person Company (OPC) is a type of company that can be formed with just one member. However, as the business grows, the need may arise to convert it into a Private Limited Company (PLC) to attract more investors and expand the operations. This process of conversion is known as the Conversion of OPC into Private Company.

What is an OPC?

OPC is a type of company that can be formed with just one member. It was introduced under the Companies Act, 2013 to promote entrepreneurship and small businesses.

Why Convert OPC into Private Company?

One person company registration is suitable for small businesses and startups, but as the business grows, the need for more investment and resources arises. Conversion of OPC into Private Company can provide the following benefits:

1. Easy access to funding: PLCs can easily attract more investors and raise funds through shares and debentures.
2. Limited Liability: PLCs have limited liability protection which means the shareholders are not personally liable for the debts and liabilities of the company.
3. Tax benefits: PLCs are eligible for tax deductions and exemptions which are not available to OPCs.

Procedure for Conversion of OPC into Private Company:

The conversion of OPC into Private Company can be done through the following steps:

Step 1: Conduct a Board Meeting and pass a resolution for conversion.

Step 2: Call a General Meeting and pass a special resolution for conversion.

Step 3: File an application for conversion in Form INC-6 with the Registrar of Companies (ROC) along with the prescribed fees.

Step 4: Obtain the approval of the Registrar of Companies (ROC) and issue a fresh Certificate of Incorporation.

Step 5: Make necessary changes in the Memorandum of Association (MOA) and Articles of Association (AOA).

Step 6: Obtain the new PAN and TAN for the company.

Documents Required for Conversion of OPC into Private Company:

The following documents are required for the conversion of OPC into Private Company:

1. Board resolution for conversion.
2. Special resolution for conversion.
3. Copy of Memorandum of Association (MOA) and Articles of Association (AOA).
4. Copy of PAN card of the company.
5. Copy of Aadhaar card of the Directors.
6. Copy of the latest audited financial statements of the company.
7. Copy of the latest income tax returns of the company.

Advantages of Conversion of OPC into Private Company

1. Access to more funding and resources.
2. Limited liability protection for the shareholders.
3. Tax benefits and exemptions.
4. Better credibility and goodwill in the market.

Why Need an Expert for Conversion of OPC into Private Company:

The process of conversion involves legal and technical aspects that require expert guidance. An expert can help in the following ways:

1. Ensure compliance with the legal and regulatory requirements.
2. Drafting and filing of necessary documents.
3. Assistance in obtaining approvals from the concerned authorities.
4. Provide guidance on the tax implications and benefits of conversion.

Conclusion:

Whether conversion of a OPC company into private or private company to OPC conversion, both are complex processes that requires expert guidance and knowledge of the legal and regulatory requirements. It can provide access to more funding and resources, limited liability protection, and tax benefits. Therefore, it is advisable to seek the help of an expert for a smooth and hassle-free conversion process.

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