Convert Proprietorship to OPC

Evolve your proprietorship and tap on to the OPC advantage

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Convert Proprietorship to OPC

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Convert Proprietorship to OPC

One person company is an improved and better form of a sole proprietorship firm. One person companies are a great business organization structure for medium-sized businesses. One person company is an improved and better form of a sole proprietorship firm and thus conversion of sole proprietorship into One Person Company is a good business decision. This business structure gives the single promoter a full control over the company and at the same time limiting his liabilities to safeguard his personal assets. The owner of this company is a shareholder. Similar to Private Company, OPC may also appoint a distinct individual as director for its management. Appointment of a nominee is mandatory in case of OPC.

Benefits of OPC over sole proprietorship

Documents Requirement

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*Subject to Government processing time

Process of converting Proprietorship to OPC

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Compare different business structures to choose the right entity type

Private Limited CompanyOne Person CompanyLimited Liability PartnershipPartnership FirmProprietorship Firm
ActCompanies Act, 2013Companies Act, 2013Limited Liability Partnership Act, 2008Indian Partnership Act, 1932No specified Act
Registration RequirementMandatoryMandatoryMandatoryOptionalNo
Registration under the Act is mandatory to set up business as Private Limited CompanyRegistration under the Act is mandatory to set up business as One Person CompanyRegistration under the Act is mandatory to set up business as Limited Liability PartnershipBoth registered and unregistered partnerships are legal, but registered entity is preferredThere is no registration criteria prescribed. But registration to establish legal identity is recommended
Number of members2 – 200Only 12 – Unlimited2 – 50Only 1
Requires minimum 2 and not more than 200 shareholdersOnly an individual being Indian resident can be the shareholderNo bar to maximum number of partners, but minimum 2 Designated Partners are requiredIt is formed with minimum 2 partners, but not exceeding 50The proprietor is the only owner of the firm
Separate Legal EntityYesYesYesNoNo
Private Company is separate entity and can own assets in its nameOPC is separate entity and can own assets in its nameLLP is separate entity from partners and can own assets in its namePartnership firm does not have any separate identity from its partnersProprietor and the business are same and not different
Liability ProtectionLimitedLimitedLimitedUnlimitedUnlimited
Liability of members is limited to the extent of unpaid value of shares subscribedLiability of member is limited to the extent of unpaid value of shares subscribedLiability of partners is limited to the capital amount agreed to introducePartners are jointly and severally liable to pay the debts of the Partnership FirmProprietor’s liability is to pay-off all debts and obligation of firm
Statutory AuditMandatoryMandatoryDependentNot mandatoryNot mandatory
Auditor must be appointed within 30 days of incorporationAuditor must be appointed within 30 days of incorporationApplicable when turnover exceeds INR 40 Lakh or contribution exceeds INR 25 LakhStatutory audit not applicable. Tax audit may be applicable based on turnoverStatutory audit not applicable. Tax audit may be applicable based on turnover
Ownership TransferabilityShares can be transferred with consent to other ShareholdersNoYesNoNo
Shares can be transferred with consent to other ShareholdersShares are not transferable easilyOwnership can be changed with consent of other partnersOwnership is not transferable easily, clause of partnership deed should be referredFirm in no different from proprietor and so ownership is not transferable
Uninterrupted ExistenceYesYesYesNoNo
Change in members or director does not affect the existence of Private CompanyChange in members or director does not affect the existence of OPC.
The nominee will take place of member
Change in Partners or Designated Partners does not affect the existence of LLPChange in partner leads to dissolution or formation of another partnership firmDeath or insolvency of proprietor directly affects the firm
Foreign ParticipationAllowedNot AllowedAllowedNot AllowedNot Allowed
Foreign national are allowed to invest under the Automatic RouteMember, nominee and director must be Indian residentForeign nationals are allowed to subject to FDI GuidelinesForeign nationals are not allowed to be a partnerForeign Nationals cannot commence proprietorship business
Tax RatesModerateModerateHighHighLow
Tax rate applicable for small companies is reduced to 25%Tax rate applicable for small companies is reduced to 25%With tax rate of 30% on business profit, tax benefits to partners is highWith tax rate of 30% on business profit, tax benefits to partners is highTax rates of individual applied to Proprietorship Firm
Statutory CompliancesHighModerateModerateLessLess
Apart from Annual filings, it has to comply with various provision laid down, but less compared to public companyApart from Annual filing, compliance are less compared to Private CompanyAnnual filing and few event based filings are necessarySeparate ITR of partnership is filed, else there are no filing requirementNo compliances and no requirement to file separate ITR
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Explore conversion of proprietorship to one person company registration in India

Frequently Asked Questions

The capital requirement of OPC and a private limited company are the same. It needs an authorized capital of  ₹1 lakh, to begin with. But, none of this actually needs to be paid-up. This means that you don’t really need to invest any money into the business. The capital should not be more than  ₹50 lakh during incorporation.

Once a Company is incorporated, it will be active and in-existence as long as the annual compliance is met regularly. In case, annual compliance is not complied with, the Company will become a Dormant Company and may be struck off from the register after a period of time. A struck-off Company can be revived for a period of up to 20 years.

  • An OPC limited by shares must comply with the following requirements:
    o Must have a minimum authorized share capital of ₹ 1 Lac.
    o Transfer of shares to anyone else is not allowed.
    o An OPC is prohibited from giving any invitations to the public to subscribe to the securities of the company.
  • When the OPC limited by shares or by guarantee, enters into a contract with the sole member of the company who is also the director of the company; the terms of contract or offer must be recorded in writing. Also, the same must be contained in a memorandum or recorded in the minutes of the Board meeting held next after entering into the contact.
  •  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.

No, an individual can form only one OPC at a time. The rule is the same for the nominee director too.

To register One Person Company (OPC) in India, acquiring the DSC (Digital Signature Certificate) and DIN (Director Identification Number) by all the directors and Subscriber to MOA (owner) along with the Nominee is mandatory. The Registered Office shall also be in existence for online Private Limited Company Registration.

The promoter of the company should make sure that the proposed name of the OPC for online registration is very unique. 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 about choosing the name for the company, please visit here Mark Business Identity Wisely – Choosing the name of Company

An OPC can be converted into a Private or Public Company only after 2 years from the date of Incorporation.

The requirement to appoint a nominee is prescribed in order to retain the character of Perpetual Existence i.e. Uninterrupted Existence of the One Person Company. A nominee shall be an individual and is to be appointed at the time of incorporation of OPC. In the event of death or incapacity to enter into any contract by existing member, the nominee will become the member of one person company.

The company shall file form INC-4 in case of cessation of member of OPC on account of death, incapacity to contract or change in ownership. In the same form, user needs to provide details of the OPC’s new member.

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Till date, it is a very good experience with the team, especially Ms. Pooja & Ms. Krishna done their jobs very nicely. Thanks to the entire team for their support.

Arup Modak
August, 2018

Really happy with your service, affordable price, and an excellent support. Best wishes team!

Gopiraj chandran
August, 2018

It was a pleasure to deal with Legalwiz team , I would definitely like to say that the team is efficient , client centric and professional , they made the entire process look so simple n easy . I would anytime in future will deal with Legalwiz and will definitely definitely recommend it without any hesitation to all my friends and in my business cirlce. Thanks team .. Thanks a lot Garvi

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July, 2018

Overall I am satisfied with the services. Aushi and Juhi both are dedicated. thanks

Manoj Lala
July, 2018

Very good service

Abdul Bari
July, 2018

Will definitely work with your firm again!! Thank You Ms. Ayushi for your kind support!!

Urvi Shah
July, 2018

Very Good services. Bhagya dealt very nicely

Naveen Gupta
June, 2018

Very quick service for incorporation of the company. Fastest among other service providers in the country. Regards, Sambhaji

Sambhaji Kadam
June, 2018
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Convert Proprietorship to OPC

Evolve your proprietorship and tap on to the OPC advantage
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