By converting an One Person Company (OPC) to a Private Limited Company (PLC), new opportunities for benefits such as fund raising can be pursued. An OPC can be converted into a PLC voluntarily, without fulfilling the criteria of paid-up share capital and average annual turnover. After altering the Memorandum of Association (MoA) and Articles of Association (AoA) of the OPC, an application for conversion is made to the Central Government. The company's legal existence continues even after the conversion, along with its rights and liabilities. However, to fulfill the minimum requirements, a minimum of two shareholders and directors must be appointed after the conversion to a Private Company. Conversion offers growth opportunities and additional funding options such as private placement funding, ESOPs, and many more.
Easier to Raise Funds
Private limited companies have relatively easier access to raising funds as they can issue shares and have multiple options to raise funds, including private equity, ESOP, and other methods.
Limited Liability of Owners
The debts or obligations of a company do not have an impact on the personal assets of the owners. Their liability is only limited to the capital they have subscribed to and left unpaid.
Taxation Benefits
It's worth noting that the One Person Company (OPC) doesn't have a separate recognition under the Income Tax Act, which means it's taxed the same as other companies. Private companies, for instance, are taxed at a 30% rate on their total income. Consequently, the OPC concept may not be as appealing from a taxation standpoint, since it can potentially place a considerable financial burden on the company.
Separate Legal Existence
After registering, a Private Limited Company is recognized as a separate legal entity from its owners and managers, which allows it to operate under its own name. This includes the ability to open bank accounts, acquire assets, and enter into contracts with other parties. Furthermore, the company's legal status provides the power to take legal action against third parties if required.
PAN Card of shareholders and Directors. Foreign nationals must provide a passport.
Voter ID/ Passport/ Driving License of Shareholders and Directors
Telephone Bill /Electricity Bill/ Latest Bank Account Statement of Shareholders and Directors
Latest Passport size photograph of Shareholders and Directors
In case of NRI or Foreign National, documents of partner must be notarized or apostilled
Duly certified copy of latest audited Finacial Statements
Certificate of Incorporation, MoA & AoA to be provided
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