Limits Director’s Liability

Businesses also tend to borrow money. For sole proprietorships, proprietors are directly responsible for all the debt. If the company is unable to repay the loan, the owner will be forced to sell his or her vehicle, home, or jewellery. Just the money spent to start the company would be lost in an OPC; all personal property would be secured.

Life indefinitely

If a founder operated as a sole proprietorship instead of an OPC, his or her company would cease to exist upon his or her death. Due to the fact that an OPC has its own legal identity, it will pass to the candidate director and therefore continue to exist.

Compliances are down.

Since an OPC may only have one director and one shareholder, annual filings are restricted to equity certificates and sworn statements.

Form-INC-6 with the following statements is used to apply for the conversion of a private limited partnership into a one-person company.

• A statement of the sort, accompanied by an affidavit signed by all directors, stating that all owners and creditors of the firm have consented to the company’s conversion into an OPC, and that the company’s paid-up capital is less than Rs. 50 lakhs and its turnover is less than Rs. 2 crores.
• Affidavits from members attesting to the fact that the paid-up capital is less than Rs. 50 lakhs and the total revenue is less than Rs. two crores for the last three financial years.
• A certificate from a chartered accountant stating that the company’s paid-up capital is less than Rs. 50 lakhs and its revenue is less than Rs. two crores.
• The company’s most recent audited profit and loss account and balance sheet.
• Both creditors have signed a letter of no objection.
• The company’s members and directors are listed below.
• A copy of the board resolution as well as the relevant resolution adopted at the EGM, as well as the notes, agenda, and insightful statement.
• OPC needs an updated copy of the MOA and AOA, as well as similar clauses. .