Converting a Private Limited Company to OPC?
In India, a Private Limited Company is a popular business structure for entrepreneurs due to its limited liability protection. However, as the business grows the compliance requirements and governer structure of a private limited company become difficult to manage by the owner.
Switching to OPC is the best move in such a case. OPC registration in India offers multiple benefits such as less compliance, a simple legal structure and a key to funding.
What is a Private Limited Company?
A private limited company is a type of business structure that is best for small-scale businesses and is held privately. The liability of the members in a private limited company is limited to the shares they own. The shares of a private limited company can not change publically.
Conversion of Private Limited Company to OPC
By fulfilling all the requirements of conversion you can convert a private limited company into OPC easily.
A paid-up capital of 50 lakhs and a turnover of fewer than 2 crore are required to convert a private limited company into an OPC.
A special resolution in an Extraordinary General Meeting(EGM) needs to be passed by the shareholders of the private limited company. Before passing the resolution it is necessary to get a no-objection certificate from the existing members and creditors.
The proposed director for OPC must be a natural person and should have spent at least days in India in a previous calendar year.
Through its Memorandum the Private limited company must appoint a nominee for the proposed OPC.
Before undergoing conversion the applicant's company must prepare its audit, profit and loss account, balance sheet, and other books of accounts. It is necessary to file all the returns of the company with the ROC.
All the professional tax provisions should followed by the organisation.