A private limited company, or LTD, is a privately held company. This implies that the business limits owner liability to its shares and limits the number of shareholders to 50. It also restricts shareholders from trading shares publicly.

One Person Company is a business entity run by a sole owner with the benefit of limited liability. One Person Company is a separate legal entity from its members, offering protection to its shareholders. Every One Person Company must nominate a member for the Directorial position in the MoA or AoA in case of the absence of the prime Director.

Advantages of One Person Company

1. Similar to a Private Limited Company and unlike Sole Proprietorship, OPC allows limited liabilities.
2. No Board Meeting formalities
3. One Person Company is not liable to conduct board meetings or general meetings.
4. More Business from Proprietorship
5. One Person Company can attract keen investors who are not interested in Sole Proprietorship owning to the risks it entails.
6. Holds reputation in the Market: As One Person Company is similar to a Private Limited Company; it attracts quality candidates to help grow the company.
7. Single Director Requirement: Only one Director is required to form the One Person Company.
8. Ease in Management: One Person Company is more easily managed as compared to a Private Limited Company.
9. Offers Limited Liability to its Member: Unlike Sole Proprietorship, it provides protection to its shareholders by limiting liability from personal assets.
10. Simple Share Transferability: Transferring shares is easily done in One Person Company by simply filling out the share transfer form and handing it over to the buyer of the shares.

Eligibility Criteria to Private Limited to a One Person Company in India

Before you’re allowed to Private Limited to a One Person Company, you must fit the following criteria

1. All the directors should consent to the decision to convert
2. Your net worth should be significantly reduced to the point where you can justify this conversion (which is a downgrade, to be honest)
3. You must appoint a nominee who can take charge of your one-person company in case of your death or incapacitation.
4. You should have the approval of your creditors before you can go through this conversion.
5. Through an affidavit, the directors have to consent that they are willing to relinquish their position so that your private limited company can be converted into a One Person Company.

Documents required for converting a Private Limited Company to a One Person Company in India

1. E-Form MGT 14
2. Copy of the Special Resolution is needed to be filed with the Registrar of Companies with the following attachments:
3. Notice of Extra General Meeting (EGM), held to gain the approval of Directors for the conversion of the Private Limited Company to One Person Company.
4. A true certified copy of Special Resolution
5. Altered Memorandum of Association
6. Altered Articles of Association
7. A true certified copy of the Board Resolution is optional
8. E-Form INC 6
9. Application for the conversion of Private Limited Company to One Person Company with the following necessary attachments:
10. List of all members and creditors
11. Latest balance sheet
12. Letter of ‘No Objection’ from the members and creditors
13. Letter of Consent from the Directors by way of affidavit

Process for converting a Private Limited Company to a One Person Company in India

The procedure for conversion of a Private Limited Company into a One Person Company model is detailed in the following steps:

1. Convene an EGM with Board Members
2. Organize an Extraordinary General Body meeting inviting your members, shareholders, directors, creditors, suppliers, and most of those involved with your private limited company on a continuous basis.
3. Obtain the Letter of Consent from the Board
4. Get the approval – Letter of consent – from the directors to initiate this conversion.
5. Obtain NOC from Creditors
6. Obtain “No objection” from the members of your company and your company’s creditors
7. Alter MoA and AoA
8. Make changes to the Memorandum of Association as well as Articles of Association.
9. Obtain the Letter of Consent
10. File the online form INC-6 via the online MCA portal. Upload the letters of consent and other requisite documents when you do.
11. Obtain the Incorporation Certificate for One Person Company
12. If approved, your business entity will go from a Private Limited Company to a One-Person business entity known as a One Person Company.

Our Assistance to convert your Private Limited Company to a One Person Company in India

We at BRITSI, provide end-to-end solutions for conversion from Private Limited to a One Person Company. Our services include:

1. Helping you organize the meeting
2. Assistance with getting NOC of the creditors
3. Filing the application for conversion.
4. Reviewing the application and making changes if needed
5. Ensuring that your business entity is converted as per your requirement.

BRITSI is a leading legal consultancy firm providing comprehensive services relating to a Private Limited Company to OPC conversion.

So, take your first steps towards this conversion and reach out to us.