Private Limited into OPC

What is OPC?

What is OPC? An OPC is a hybrid structure, wherein it combines most of the benefits of a sole proprietorship and a company form of business. It has only one person as a member who will act in the capacity of a director as well as a shareholder.

One person company is a new concept in India which has been introduced by the companies act 2013. In the old Companies act 1956 a minimum of two directors and shareholders were required to form a private limited company. However in case of a One person company, only 1 person is required who can be a shareholder as well as the Director. Hence the name, One Person Company.

Why convert Private Limited Company into One Person Company?

Reasons

One person company (OPC) is a new form of business introduced by Companies Act, 2013. It is hybrid form of business where a sole proprietorship concern can get a corporate outlook. By converting a private limited company into OPC, one can avail the benefits that OPC has to offer such as complete control over operations, less compliances and management etc.

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What is the

Documents required

What is the Procedure for OPC Conversion?

A private limited company can be converted into OPC only if it has not more than 50 lakh rupees paid up share capital or average annual turnover is 2crores or less during the immediately preceding 3 financial years.
Board Meeting: Board meeting has to be convened by issuing proper notice to get, in-principal approval of directors for conversion of the company to OPC, fix time and place of EGM to get shareholders’ approval, to approve notice of EGM along with Agenda, to authorize director or company seretary to issue EGM notice.
Company shall also obtain NO objection certificate from existing members and creditors.
EGM notice should be issued atleast 21days before the EGM to all the directors, members and auditors of the company.
EGM is convened and shareholders approval through special resolution is obtained for conversion into OPC.
Company is required to file Special Resolution passed by shareholders for Conversion of Private Company into One Person Company (OPC) with concerned Registrar of Companies. Hence, file form MGT.14 within 30 days of passing of Special Resolution with the concerned Registrar of Companies, with prescribed fee and attachments.
The company shall file an application in Form No.INC.6 for its conversion into One Person Company along with prescribed fee and attachments
Concerned Registrar of Companies (ROC) will check the E-forms and attached documents filed by the Company for Conversion of Private Company into One Person Company (OPC). On being satisfied that Company has complied with prescribed requirements the Registrar shall issue the Certificate to the effect of Conversion of Private Company into One Person Company (OPC).

What Includes in this package?

Verification of Documents
Applying DPIN and DSC for the partners
File LLP Agreement
Incorporation Certificate will be delivered

Frequently Asked Questions (FAQ)

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What is the validity period of the name approved for LLP?

The approved name of LLP shall be valid for a period of 3 months from the date of approval.

Can a LLP undertake Not-for-Profit activities?

No. One of the requisite of an LLP is to carry on business for profit.

Will the assets and liabilities of the firm be transferred automatically to LLP?

All tangible as well intangible property vested in the firm, all assets, interests, rights, privileges, liabilities, obligations relating to the firm and the whole of the undertaking of the firm shall be transferred to and shall vest in the LLP without further assurance, act or deed.

Can the losses or unabsorbed depreciation of the proprietorship concern be carried to the LLP?

The accumulated loss and unabsorbed depreciation of firm is deemed to be loss/depreciation of the successor LLP for the previous year in which conversion was effected. Thus such loss can be carried for further eight years in the hands of the successor LLP.

What are the compliance requirements for LLPs?

Every LLP is required to maintain annual accounts reflecting true and fair view of its state of affairs. A statement off accounts and solvency shall be filed by every LLP with the registrar of LLP every year.

When is an LLP required to get its books audited?

If the LLP has a turnover of Rs.40 lakhs or more and/or has a capital contribution of Rs.25 lakhs or more, the financial statements should be audited..