One person company
When an OPC has a paid-up capital that is equal to or more than Rs. 50 lakhs or the annual turnover for the relevant financial year exceeds Rs. 2 crore, then in such conditions, the company has to compulsorily convert itself into Private Limited Company or Public Limited Company. OPC can voluntarily be converted into any type of company after two years from the date of incorporation irrespective of whether the paid up capital exceeds Rs. 50 lakhs or not or its average annual turnover during the relevant period exceeds Rs. 2 crore or not. Legaljini can help you with the establishment of the One Person Company (OPC) by obtaining relevant registration.
Advantages of One person company
The compliance requirements for a OPC are very minimum as compared to a private limited company. Hence OPC can focus better on other functional and core areas.
The biggest advantage of an OPC is that its identity is distinct from that of its owner. Therefore, if the firm is embroiled in a legal controversy, the owner will not be sued, only the company will be sued.
No requirement to hold Annual General Meeting or Extra-Ordinary General Meeting:
Since there is only one member, there is no requirement of holding Annual General Meeting or Extra-Ordinary General Meeting
The another advantage of OPC is limited liability whereby the liability of the member will be limited. It means, responsible only to a limited amount for debts of a company. This benefit is not available in case of a sole proprietorship.