of Proprietorship to OPC
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How to Start Conversion of Proprietorship to OPC?
Overview
A sole proprietorship also known as a sole trader or a proprietorship is an unincorporated business that has just one owner who pays personal income tax on profits earned from the business.
On the other hand One Person Company is a company which has only one person as its member. An OPC is a type of business entity that has only one shareholder as its member. One Person Company provides more advantages such as limited Liability, Legal Status, and Corporate Identity, Quick Decision-Making, flexible in Management, easy bank operation reduced taxation burdens
Prerequisites of Converting Sole Proprietorship to OPC (One Person Company) :
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A shareholder who shall be an Indian resident.
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Minimum of one director, only individuals can be nominated as directors of the company.
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The person appointed as the nominee.
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The name of a One-Person Company shall end with the words '(OPC) Private Limited'
OPC is one of the easiest forms of corporate entities to manage. OPC is a hybrid of sole-proprietorship and corporate form of business. It has been given relaxations in the compliance requirements under the Companies Act.It is a form of a company where the compliance requirements are less than that of a private company
When it comes to the registration process there is no clear cut way to register a Sole Proprietorship and on the contrary, there is less compliance to register a One Person Company.
The concept of OPC opens up new business opportunities for sole proprietors and entrepreneurs who wish to enjoy the benefits of limited liability, and at the same time have a separate legal entity. OPC removes the hassle of finding the right partner to start business as a registered entity. It requires only one person who will act as member, shareholder and director.
Why to Choose Legaltax as your Service Provider for Conversion of Sole Proprietorship to OPC?
Legaltax is an exclusive platform which provides all types of legal and tax services to you and also helps end-to-end incorporation, compliance, advisory and management consultancy services to clients in India and abroad. Incorporating a One Person is slightly simple, seamless, reasonable, cheapest and fastest with Legaltax.in Apart from a One person Company , Legaltax also helps entrepreneurs with Private Limited Company Registration, public Limited Company Registration, Partnership Registration, HUF, LLP Incorporation and Proprietorship Firm Registration easily. You may contact us for free advisory on all the services.
Benefits of Converting Proprietorship to OPC
Security of the company’s personal assets ensures that the owner has limited liability to the extent of his/her own share.
Large organizations prefer to deal with OPCs rather than proprietorship firms. OPC is registered just like a private company and private companies are a reliable form of business which makes it easy for them to get funds from financial institutions. It gives suppliers and customers a sense of confidence in the business.
The structure of OPC is manageable as it has only one member. There is no need to hold an annual or extraordinary general meeting. There is no need to wait for someone's approval as there is only one person who is the sole authority to take the decision.
OPC gives the company a structure similar to that of a Private Limited Company and hence organizes it with the advantage of limited liability. A sole proprietorship does not provide an organized structure.
Required Documents For Conversion of Proprietorship to OPC
- Identity Proof
Scanned copy of PAN Card/ Voter ID/ Passport/ Driving License. - Address Proof
Latest Bank statement/ Utility bill in the name of directors and nominee which should not be older than two months - Registered Office Proof
No Objection Certification (NOC) from the owner, Utility bill (should not be older than two months) and Notarized Rent agreement (in case of rented property)/ Registry Proof or House Tax Receipt (in case of owned property) - Consent of nominee
Written consent of nominee is required to be filed with the registrar of Companies (RoC) - Passport size photograph
Latest Passport Sized photograph of the directors and nominee.
Convert into OPC in 3 easy Steps
- Answer Quick Questions
- It takes less than 10 minutes to fill in our Questionnaire
- Provide basic details & documents required for registration
- Make payment through secured payment gateways
- Experts are Here to Help
- Assigned Relationship Manager
- Procurement of Digital Signatures (DSC)
- Application for Name Reservation
- Documents drafting including MOA and AOA
- Certificate of Incorporation
- Your Company is Registered
- All it takes is 12 15 working days*
*Subject to Government processing time
Process of Converting Proprietorship to OPC
- Day 1
- Application for Digital Signature Certificate
- Day 2-4
- Checking Name availability
- Application for Name Reservation under “RUN”
- Reservation of Name
- Day 5-8
- Drafting of MoA, AoA & other documents
- Payment of stamp Duty
- Notarization of required documents
- Day 9-10
- Filing application for company registration
- Application for DIN Allotment
- Application for PAN and TAN of company
- Day 11-15
- Government processing time
Frequently Asked Questions (FAQs)
- An OPC limited by shares must comply with the following requirements: o Should have a minimum authorized share capital of ₹ 1 lakh. No transfer of shares to any other person is permitted. The OPC is prohibited from making any invitation to the public to subscribe for the securities of the company.
- When an OPC limited by shares or guarantee enters into a contract with the sole member of the company who is also a director of the company; The terms of the contract or offer must be recorded in writing.Also, it should be included in the memorandum or recorded in the minutes of the Board meeting held after the communication has been made.
- An OPC must inform the Registrar about every contract entered into by the company with the sole member of the company within a period of fifteen days from the date of approval.
The Promoter of the company should make sure that the proposed name of the OPC for online registration is very exclusive. Further, all the documents with respect to the Subscriber, Nominee and Directors as well as Registered Office shall be as per the requirement.
To know more related to choosing the name for the company, please visit here Mark Business Identity Wisely - Choosing the name of the company
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