Conversion of One person company into pvt ltd company

Posted by registrationwala on March 19th, 2016

One person company is a new thought to give support to sole proprietorship it encourage individuals to open their own company by investing his own money without any hindrance with full control.

Through OPC the dream of individual of opening his own company become true.

The main benefit of OPC is that the liability of the director is limited only towards assets of the company while in case of proprietorship the liability is unlimited i.e. in case of any loss the creditors can claim towards proprietor personal asset.

A One person Company can convert into private limited company under two situations;

  1. At its Own Will- The OPC after completion of two years from the date of its incorporation can apply for conversion into limited company(either private or public).
  1. Mandatory Conversion- when the paid-up share capital or annual turnover of the financial year is equal to or increased 50 Lakhs and 2 Crores respectively, then in such condition company has to convert itself.

After such conversion the new entity came into existence and now, the profits and liability is divided amongst the director of the company i.e. two in case of private company and 5 in case of public company. Now every act is done by board of directors instead of Individual. 

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