If you running a One Person Company OPC and Planning to convert the same to a Private Limited Company in India, here you will find all the relevant information like criteria, eligibility and documents required and other details.
A One Person Company can voluntarily convert itself after 2 years of incorporation only. The application for the conversion can be made only after alteration of the MoA and AoA of the One Person Company.
The conversion to a Private Limited Company can open new horizons for the OPC. Raising Funds becomes so much easier in order to expand and grow the business with funding options like ESOP, equity shares, etc.
Reasons you should consider Conversion of One Person Company OPC to a Private Limited Company in India
- Limited Liability – The owner of a Private Limited Company has a limited liability whereby they only have to pay the specific amount of capital that they have subscribed to. The personal assets of the owner remain untouched in times of crisis.
- Independent Legal Existence – A Private Limited Company is a separate legal entity and is independent of its managers and owners.A Private Limited Company can sign new contracts, have its independent bank account and even sue third parties because of its independent existence in the eyes of law.
- Raising Funds becomes easier – Raising funds with a Private Limited Company is easier than it is with any other business structure as it gives the opportunity to raise funds in the form of Private Equity, ESOPs, etc.
- Tax Benefits – OPCs are not even recognised under the Income Tax Act. On the other hand, Private Limited Company has been placed under the tax bracket of 30% on the total income.
Prerequisites to convert One Person Company OPC to Private Limited Company in India
- The paid-up share capital of the OPC becomes more than Rs. 50 lakhs.
- The annual turnover exceeds Rs. 2 crores, for the last three consecutive years.
- At least 2 shareholders and directors have to be appointed for the Private Limited Company.
List of Required Documents to convert One Person Company OPC to Private Limited Company in India
- PAN Card, Aadhar Card, Voter ID, of all the directors and shareholders.
- Passport (in case of foreign nationals or NRIs)
- Passport size photos of all the directors and shareholders.
- Telephone/Electricity Bill of all the shareholders and directors.
- Latest bank account statement of all the directors and shareholders.
- Certified copy of latest audited financial statements.
- MoA, AoA, Certificate of Incorporation.
Please note that in case of directors that are Foreign Nationals and NRIs, all the above mentioned documents have to be notarized.
Procedure for Conversion of One Person Company OPC to Private Limited Company in India with Seedup.in
- Fill the forms – The first and foremost step requires you to fill out the questionnaires and submit the required documents.
- Application for DSC- The next step is to apply and procure the Digital Signature Certificate for the new director.
- Reservation for Name – The next step is checking for the availability of the name and then reserving it under RUN.
- Alteration of the MoA and AoA – The next step is preparing all the documents by altering the drafts of the MoA, AoA and filing the altered draft.
- Application for PAN and TAN – After the incorporation of the Private Limited Company, applications for the allotment of the DIN, PAN and TAN have to be filed.
This entire procedure with Seedup.in should take around 20 working days.