The capital requirement of OPC and a private limited company are the same. It needs an authorized capital of ₹1 lakh, to begin with. But, none of this actually needs to be paid-up. This means that you don’t really need to invest any money into the business. The capital should not be more than ₹50 lakh during incorporation.
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Convert Proprietorship to OPC
One person company is an improved and better form of a sole proprietorship firm. One person companies are a great business organization structure for medium-sized businesses. One person company is an improved and better form of a sole proprietorship firm and thus conversion of sole proprietorship into One Person Company is a good business decision. This business structure gives the single promoter a full control over the company and at the same time limiting his liabilities to safeguard his personal assets. The owner of this company is a shareholder. Similar to Private Company, OPC may also appoint a distinct individual as director for its management. Appointment of a nominee is mandatory in case of OPC.
Benefits of OPC over sole proprietorship
1) Separate Legal Entity hence limited liability
Protection of the company’s personal assets assures that the owner has limited liability to the extent of his/her own share.
2) An easy to manage structure
The structure of OPC is manageable as there is only one member. There is no requirement to hold an annual or added ordinary general meeting. There is no requirement to wait for anyone’s approval as there is only one person who is the single authority to make decisions.
3) Opens better business avenue’s
Large organizations prefer to deal with OPC instead of proprietorship firms. OPC is registered just like a private company and private companies are the trusted form of business which makes it easy for them to get funding from the financial institutions. It gives suppliers and customers a sense of confidence in the business.
The OPC gives the company a structure similar to a private limited company and hence make it organized with the benefit of limited liability. A sole proprietorship does not provide an organized structure.
Convert Proprietorship to OPC Online Process
Documents Required For GST Registration
Conversion of Sole Proprietorship firm to One Person Company (OPC)
Simply, there is no formal way of converting a sole proprietorship firm into an OPC. You just have to apply for a fresh registration. Therefore, the steps would be same as starting a fresh One Person Company.
To start an OPC, there has to be two people, one is the director/owner and other is the nominee. The steps are as mentioned below:
- The person willing to start an OPC has to submit his digital signature to the Registrar of Companies.
- The person selects a name for his company and check if the name is available. The name should comply with the guidelines of Ministry of Corporate Affairs. The owner can submit six names and can assign their priority. The name would be allotted according to the priority and availability. The name must contain at least two words, one is the name of the company and other is the nature of business.
- Once the name is approved, the director has to submit several documents such as Memorandum of Association and Article of Association. Also, he has to submit an address proof for the office.
- The documents are examined by the Registrar of Companies, and on successful verification, the owner is handed over a certificate for his incorporation.
Once a Company is incorporated, it will be active and in-existence as long as the annual compliance is met regularly. In case, annual compliance is not complied with, the Company will become a Dormant Company and may be struck off from the register after a period of time. A struck-off Company can be revived for a period of up to 20 years.
There are three different types of FSSAI registration, the required time for FSSAI license registration differs.
1. The basic FSSAI license will be delivered in 7 working days.
2. State license and Central license will be provided in 30 days.
No, an individual can form only one OPC at a time. The rule is the same for the nominee director too.
The requirement to appoint a nominee is prescribed in order to retain the character of Perpetual Existence i.e. Uninterrupted Existence of the One Person Company. A nominee shall be an individual and is to be appointed at the time of incorporation of OPC. In the event of death or incapacity to enter into any contract by existing member, the nominee will become the member of one person company.
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