Section 2(62) of Companies Act defines a one-person company as a company that has just one person on its member. Furthermore, members of a corporation are nothing but subscribers to its memorandum of association, or its shareholders. So, an OPC is effectively a corporation that has just one shareholder as its member.
When an OPC has paid up share capital that exceeds Rs. 50 lakhs and therefore the annual turnover is above Rs. 2 crores, then it’s obligatory for them to convert into a private Ltd. . During the conversion, the members need to just pass a special resolution in the general meeting
An OPC gives the advantage of indebtedness to entrepreneurs whereby the liability of the member are going to be limited to the unpaid subscription money. This benefit isn’t available just in case of a sole proprietorship. “Thus OPC allows an individual to require risks without risking his/her personal assets”.
The major difference between OPC and LLP is that the number of members. OPC are often established with just one Shareholder and one Director (It can have up to fifteen Directors though) whereas an LLP should have a minimum of two Partners and a maximum of upto 200 partners.
When an OPC is incorporated, the conversion cannot happen before two years. The procedure of voluntary conversion of an OPC into a private Ltd. falls under the section 18 of the companies Act. … On submission of all relevant documents, the registrar has the facility to issue a certificate of incorporation.