Convert Private into OPC Company
Overview of the Conversion of a Private Company into an OPC
The Companies Act of 2013, which creates a system to convert one type of business into another, allows for the conversion of a PLC (Private Limited business) into an OPC (One Person Company). Section 18 of the Act expressly permits the conversion of a previously registered private limited corporation beginning on April 1, 2014.
The conversion of a Private Company into an OPC has no effect on the company’s prior duties and contractual commitments, and such claims, liabilities, and obligations are legally enforceable, and the new OPC is accountable for them.
Private Company to OPC Conversion
A Public Limited firm is a firm with limited liability whose shares are openly exchanged and sold to the general public. To convert a private company to a public limited company under the Companies Act 2013, you must have at least three directors, seven shareholders, and a paid-up capital of five lakh rupees.A One Person Company (OPC) can be founded with only one owner who serves as both the company’s director and shareholder. There can be more than one director, but only one shareholder. Converting a Private Limited Company to an OPC requires a paid-up capital of less than 50 lakh and an annual revenue of less than 2 crore.
The Advantages of Converting from PLC to OPC
Liability of the Director is Limited
Businesses frequently require financing. Owners of sole proprietorships are individually accountable for all debts. If the business cannot repay it, the entrepreneur must sell his or her vehicle, house, or jewelry to do so. Only the money spent in launching the firm would be lost in an OPC; all personal property would be secure.
Existence indefinitely
If a promoter operated as a sole proprietorship rather than an OPC, the firm would stop when he or she died. Because an OPC has its own legal personality, it will be passed on to the nominated director and hence continue to exist.
Less Compliance
Due to the fact that an OPC can only have one director and one shareholder, annual filings are restricted to share certificates and statutory registers.