Conversion of Proprietorship into One Person Company (OPC) in Hyderabad, Telangana

One Person Company (OPC) is a superior and enhanced version of a sole proprietorship firm in Hyderabad, Telangana. For carrying out medium sized businesses, One Person Company becomes a prominent type of business structure.

In this business structure, the owner of the company is the shareholder who has complete control over the company. Along with that the liability of the shareholder is limited which helps him to prevent his personal assets. Like a private limited company, OPC in Hyderabad, Telangana can also appoint a different individual for the position of the director for the management of his company.

Difference between Sole Proprietorship firm and One Person Company

A business which is owned, led, and governed by one person is known as sole proprietorship. As this type of business is very easy to start, it attracts more investors to start sole proprietorship.

The owner of the business is eligible to enjoy the entire profit of the business but on the other hand he or she is also entitled for all the losses of the business. Like if any creditors are entitled to receive money from the sole proprietorship, they can sell the personal assets of the owner to clear their debts.

Also, as the owner and business are not different legal entities, the business is discontinued if the owner is deceased. All the difficulties and issues faced by the sole proprietorship are eliminated in the case of One Person Company (OPC) in Hyderabad, Telangana, which provides lots of benefits to the businessmen, small traders, and entrepreneurs.

The cost of registration and maintenance of One Person company (OPC) in Hyderabad, Telangana is very minimal. One person Company business type acts as a separate legal entity with the feature of perpetual succession along with the benefit of limited liability.

A person can become a shareholder cum director and register as a One Person Company (OPC). And in case of One Person company, it is mandatory to appoint a nominee. The nominee should be a resident of India.

In the event of the death of the owner of the One Person company, the nominee becomes the owner of the company and handles the affairs and administration of the company.

Incorporation of a One Person company is very simple process and involves paperwork. Owner needs to pay the required fees to the ROC for registration of the company and needs to appoint a company secretary to receive his services in the form of drafting and signing of the required documents for incorporation of a company. In the case of forming a sole proprietorship firm the above procedures are not needed.

The finest part of incorporating a One Person Company in Hyderabad, Telangana is that it helps in obtaining Brand image and corporate recognition. It becomes the main reason for an investor to start a One Person Company.

Conversion of Proprietorship into One Person Company (OPC) in Hyderabad, Telangana

Hyderabad is the largest city and the capital of the southern state of Telangana. The state of Telangana hosts various manufacturing sector and services sector companies that are operational in and around Hyderabad. Few main Industries that contributes to the GDP of the Telangana state includes Automobiles and auto components industry, textiles, spices, mining and minerals, pharmaceutical, horticulture, poultry farming, etc Talking about Hyderabad, it is becoming a hub for IT and ITES companies with state of the art infrastructure and facilties. Telangana state ranked 2nd as the best state in terms of ease of doing business. As such startups and running business prefer the Hyderabad in the state of Telangana for the process of Limited Liability Partnership (LLP) Registration in Hyderabad.

The state of Telangana is the leading business destination for horticulture crops, Sericulture and fisheries, manufacturing units in pharmaceuticals, units of food processing, industrial units for non-metallics minerals, plastics or electrical equipment. The city of Hyderabad also hosts the film industry with world’s largest film studio, Ramoji Film City.

Telangana is second largest exporter in India and ranks 2nd in terms of Export Preparedness Index 2020 under category of Landlocked states. Hyderabad, capital of state Telangana, is one of the epicenter of IT and ITes Businesses. Not only IT, state also contributes big-time in pharmaceutical exports. With extensive road network of over 27,600 km, 24 national highways along with an international airport in Hyderabad, the city provide the proper connectivity across India and various other parts of the world. With 67 notified SEZ (Special Economic Zones), it becomes the perfect choice for registration of Limited Liability Partnership (LLP) in Hyderabad, Telangana.

To facilitate business start in the state, it has the Industrial Project Approval and Self-certification System (TS-iPASS) Act, that mandates the clearances to any mega projects within 15 days. For other projects the timelines is for 30 days. Such timelines are the best in India. Apart form this, the state of Telangana introduced ‘Right to Clearance’ for industries for necessary clearances within specified timelines. Telangana received the investments of USD 11.5 billion in last 5 years after the launch of new Industrial Policy in 2015.

Not only this, as per the latest report by World Bank, Hyderabad ranks 2nd in terms of ease of doing business and first in India for subcategories like “enforcing contracts and resolving insolvency” in the rankings of “Ease of Doing Business. In terms of parameter “ start a business”, which is very relevant for startups for registration of Limited Liability Partnership (LLP) in Hyderabad, Telangana, ranks 4th city in India.

Advantages of One Person Company over the Sole Proprietorship in Hyderabad, Telangana

      1. Limited liability and Separate Legal Identity: Registration of a business as a One Person Company (OPC) gets a separate and distinct legal identity in Hyderabad, Telangana which helps the owner to enjoy the benefit of limited liability to the extent of his/ her own share in the company.
      2. Opens door for business opportunity: Most of the large sized organisations prefer to do business with the companies rather than sole proprietorship firms. Registration of a One Person company in Hyderabad, Telangana is same as that of a private company in Hyderabad, Telangana and as the private company is the trustworthy form of business organisation, it helps the One Person company to raise the funds easily. It helps the suppliers and customers of the business to build confidence in the company in Hyderabad, Telangana.
      3. Manageable Structure: As only one member is required to start a One Person Company, It is very easy to manage the structure of the business. Conducting an Annual general meeting is not required in this type of business. The decision-making process is very easy and quick as there is only one person or authority who is responsible to make the necessary decision for the company.
      4. Structure like a private company: The structure of the One Person Company is the same as the private limited company which makes it organized giving the benefit of limited liability. The benefit of the organized structure is not provided by the sole proprietorship firm.
      5. Ease in availing loan facility: Banks and other financial institutions give preference to the company rather than propitiatory firms in lending money. So, converting the sole proprietorship firm into a One Person company helps them to get the loans easily from the banks and other financial institutions.
      6. Filing of Annual Return: The mandatory requirement of getting the annual return signed by the company Secretary is not required in case of One Person Company. In OPC, it should be signed by the director.

Conversion of Proprietorship into One Person Company (OPC)

Process for Conversion of Sole proprietorship to One Person Company in Hyderabad, Telangana

Two people are required to register for an OPC in Hyderabad, Telangana, One of which is the owner/ director, and the second person will be the nominee. Following are the steps for converting a sole proprietorship into a One Person company in Hyderabad, Telangana:

      1. Obtain Director Identification Number (DIN): The first step in converting is that the owner needs to apply for Director Identification Number in Hyderabad, Telangana.
      2. Obtain Digital Signature Certificate (DSC): The Owner/ director needs to obtain a digital signature certificate and the same must be submitted to the Registrar of Company in Hyderabad, Telangana.
      3. Application for approval of name: The owner needs to check whether the chosen name for his company is available or not. The chosen name should be in accordance with the compliance of the guidance given by the Ministry of Corporate Affairs. The owner can choose six names and submit it by giving his priority based on which the name is allotted in accordance with the availability. The name of the company should be of at least 2 words, One which depicts the name of the company and the other shows the nature of the business.
      4. Drafting of Memorandum of Association (MOA) and Article of Association (AOA): After the approval of the name of the company, the draft of the MOA and AOA of the company along with various other required documents needs to be prepared.
      5. Filing of E-forms: Once the Memorandum and Article of Association is drafted, an application needs to be filed for registration of the company and the MOA, AOA and all the other required documents need to be submitted with the Registrar of the Company.
      6. Issuance of the Certificate of Incorporation: After the submission of all the documents, the Registrar of the Company (ROC) verifies all the documents and after scrutinizing all the documents and successful validation, ROC issues the Certificate of Incorporation to the owner of the Company.
      7. Apply for the TAN and PAN of the company: After the incorporation of the company, it needs to apply for the TAN (Tax Deduction and Collection Account Number) and PAN for the company.


Documents required in converting sole proprietorship firm into a One Person Company in Hyderabad, Telangana:

      1. Pan Card of the director and shareholder of the company. And if they are of foreign nationality, then they need to submit a copy of the valid passport.
      2. Directors and shareholders need to submit a valid identity proof like Voter ID, Driving license or Passport.
      3. Director and shareholder in Hyderabad, Telangana should have a valid address proof in form of Electricity bill, telephone bill, or latest statement of bank account.
      4. Director and shareholder’s passport size photograph.
      5. Address proof like Rent agreement, telephone bill or electricity bill of the registered office address in Hyderabad, Telangana.
      6. No Objection Certificate (NOC) from the owner of the office property in Hyderabad, Telangana.
      7. Approval from the nominee must be in writing.
      8. Latest Income tax return copy of the owner.

Other Information

    1. The One Person Company is required to have authorized capital of minimum Rs. 1 lac.
    2. Transferring of shares to any other person is prohibited in case of One Person Company.
    3. An individual can only have a single One Person Company at one time in Hyderabad, Telangana.
    4. An OPC is restricted from inviting public to subscribe its securities.
    5. An OPC needs to inform the Registrar about all the contract it is entering into along with its single member within 15 days from the date of contract or agreement.
    6. It is mandatory for the OPC in Hyderabad, Telangana to file form ADT 1.
    7. Till the time the OPC is meeting all the annual compliance after the incorporation of the company, it will be active and in existence. The company will set as a dormant company if in case the annual compliance is not met. The registrar can also strike off the company which can be resuscitate only for a time being of up-to twenty years.
    8. Nominee is appointed in the case of One Person Company to retain its characteristic of perpetuity which means continuation of the business in the event of the death of the owner. Any person can be appointed as the nominee subject to he or she should have a valid Pan Card in her or his name.
    9. The nominee of the company can anytime be changed by giving prior intimation to the Registrar of the Company in Hyderabad, Telangana.
    10. A One Person company in Hyderabad, Telangana can become a member of the other private limited company as there are no restrictions given in the Act.
    11. A One Person company after a period of 2 years from the incorporation date can easily be converted into a public limited company or a private limited company in Hyderabad, Telangana.
    12. Registration of a One Person Company has become an online process. So, the person is not required to be physically present at the time of registration in Hyderabad, Telangana.
    13. The One Person Company need to file the form INC- 4 in case of the death of its member, disqualification of contract or any kind of change in terms of ownership of the business. And the details of the new user or member need to be provided in the same form.
    14. To fasten the process of the registration of One Person Company in Hyderabad, Telangana, the promoter should ensure that the chosen name for the company is unique. Along with that all the necessary documents required in relations to the nominee, subscriber, director, and the registered office is proper and accurate.

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