According to the Companies Act, 2013, which implements a mechanism for changing one sort of organisation into another, a non-public confined organization may be transformed into an OPC (One Person Company). It is explicitly said in Section 18 of the Act that an organization that is already registered as a non-public confined organisation from 1 April 2014 may be transformed.
This conversion of the PLC to OPC might now no longer have an effect on the provisions of the organization’s contractual duties and the responsibilities, liabilities, and claims that existed earlier than the conversion; and, in such case, the OPC might be responsible for such claims, liabilities, and duties as set forth withinside the law.
When a promoter of a non-public organization chooses to renounce his position, the organization’s shape has a tendency to fall apart while the promoter chooses to renounce from his position. The expert in any such state of affairs indicates that the organization is transformed into an OPC shape. The OPC is a shape of commercial enterprise shape that doesn’t require multiple shareholders so it will turn out to be incorporated.
Benefits of One Person Company
- Decision making: It will become less difficult to make selections when there’s the handiest one man or woman to make them. By having the handiest one man or woman makes the decision, the decision-making system will become quicker and time may be applied to finish different effective responsibilities.
- Lesser Compliance: One man or woman groups have minimum ROCs and annual compliances.
- Reduced workload: Person Companies have fewer responsibilities to deal with, which include annual filing, percentage certificates, etc.
- No AGM required: Private confined groups are required to preserve an annual standard assembly at the least as soon as a yr, in addition, to following many different felony necessities which might be obligatory for groups with multiple shareholders.
PLC to OPC Conversion Checklist
For conversion of Private Company into OPC, the subsequent necessities have to be followed:
- Both the organization’s stability sheet in addition to its books of bills has to have been organized in a well-timed style throughout the organization.
- ROC (Registrar of Companies) returns for the organization had been indexed and filed.
- During this audit, we can be checking for the reason of making sure the organization has paid the desired stamp responsibility on the percentage certificates in addition to making sure that the percentage certificate had been well matched to the price of stamp responsibility.
- All TDS(Tax Deducted at Source) had been deducted through the organization and copies of all TDS returns had been submitted.
- Before beginning the conversion of the organization’s VAT and Service Tax to GST, the organization had paid the proper taxes and filed the proper returns.
- It is essential to test that the organization is preserving a file of its board conferences, in addition to shareholder conferences at its registered workplace, and updating the organization’s records.
- According to country laws, the organization operates offices, shops, warehouses, etc., below the store and established order acts.
- If relevant to the country wherein the organization’s registered workplace is located and the states wherein it has employees, the organization complies with the necessities of the expert tax, if relevant to the country wherein the organization has its employees.
- It is important for the organization to sign in below the Employees State Insurance Corporation (ESIC) if it has greater than 10 employees, in addition to below the Provident Fund while there are greater than 20 employees. The organization has to additionally be reporting month-to-month returns and paying dues below each the Provident Fund and the ESIC.
There are some provisions that may extra de a non-public confined organisation right into a one-man or woman organisation:
- There is much less than 50 lakhs of capital supplied through the organization.
- As an end result of the preceding 3 innovative monetary years, it’s miles anticipated that the organization’s turnover can be below the brink of Rs. 2 crores withinside the coming monetary yr. Additionally, if the organization is new and has now no longer finished 3 years, then the turnover can be calculated from the date of its incorporation.
- An unmarried character of Indian nationality will be the handiest shareholder of the ensuing OPC.
- The shareholder of the OPC is someone who is living in India for a hundred and eighty consecutive days in the course of the calendar yr and is a resident of India.
- In order for the OPC to end result, its shareholder cannot be a shareholder or candidate of another OPCs.
- OPCs can not have minors as participants or participants.