One Person Company Turnover Limit
One Person company is new concept of Companies Act 2013. Company get registered with one person. Its self employment and single ownership. Only a natural person who is citizen of India can apply for One person company registration. The company have one share holder and one nominee. Name of member get registered with ROC. OPC is a legal entity separate from its member, offering limited liability protection to its sole member. Companies Act 2013 given certain limitation for One person company paid-up-share capital & its turnover. If one person company exceed given limit then OPC shall cease to be entitled to continue as a One Person Company. One shall required to convert it self to Private Limited company.
Legal Provision of Turnover & Paid up capital Limit of OPC
One Person Company to convert itself into a public company or a private company in certain cases.-
(1) Where the paid up share capital of an One Person Company exceeds fifty lakh rupees or and its average annual turnover during the relevant period exceeds two crore rupees, it shall cease to be entitled to continue as a One Person Company.
(2) Such One Person Company shall be required to convert itself, within six months of the date on which its paid up share capital is increased beyond fifty lakh rupees or the last day of the relevant period during which its average annual turnover exceeds two crore rupees as the case may be, into either a private company with minimum of two members and two directors or a public company with at least of seven members and three directors in accordance with the provisions of section 18 of the Act.
(3) The One Person Company shall alter its memorandum and articles by passing a resolution in accordance with sub-section (3) of section 122 of the Act to give effect to the conversion and to make necessary changes incidental thereto.
(4) The One Person Company shall within period of sixty days from the date of applicability of sub-rule (1), give a notice to the Registrar in Form No.INC.5 informing that it has ceased to be a One Person Company and that it is now required to convert itself into a private company or a public company by virtue of its paid up share capital or average annual turnover, having exceeded the threshold limit laid down in sub-rule (1).
What is Paid-up Share Capital Limit of One Person Company ?
In case the paid-up share capital of an OPC exceeds fifty lakh rupees & its average annual turnover during the relevant period exceeds two crore rupees, it shall cease to be entitled to continue as a One Person Company.
Example : An OPC Having paid-up capital of Rs. 55 Lac & turnover Rs. 2.20 Cr What will be the consequences as per CA 2013? As per Companies Act 2013 , One Person Company shall be required to convert itself, within six months of the date on which its paid up share capital is increased beyond fifty lakh rupees or the last day of the relevant period during which its average annual turnover exceeds two crore rupees as the case may be.
What is turnover Limit of One Person Company ?
In case turnover of an OPC exceeds two crore rupees & paid up share capital is increased beyond fifty lakh rupees , it shall cease to be entitled to continue as a One Person Company.
What if One Person Company Turnover Limit Exceed ?
If one person company paid up share capital exceeds Rs. 50 lac or paid up share capital of an One Person Company exceeds fifty lakh rupees during the relevant period exceeds two crore rupees, it shall cease to be entitled to continue as a One Person Company.
What is time line to convert OPC to Private Limited Company ?
OPC Shall be inform within sixty days of exceeding threshold limits to ROC.
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