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A private limited company or a privately held company restricts shareholders from trading shares publicly. The private limited company requires minimum two and maximum 50 members. The minimum of 2 Directors are required as a prerequisite.

One Person Company is a business entity in which there is one owner with limited liability who can act both as shareholder and Director.

One Person Company is a separate legal entity from its members, offering protection to its shareholders. Every One Person Company must nominate a member for the Directorial position in the MOA/AOA, in case of absence of the prime Director.

Advantages of One Person Company

• Enjoys Limited Liability : The liability under One Person Company is limited and the personal assets are not liable.
• Easy Compliance : One Person Company is not liable to general meetings and very few e-forms are required to be filed with the Ministry of Corporate Affairs
• Ownership : Only one Director is required to form the One Person Company.
• Manageable : One Person Company can be easily managed as the compliances are few and due to single ownership the powers are constrain to one hand which results in speedy decisions.
• Shares Transferability : Shares can be transferred easily without any hassle by simply filing the share transfer form and handing over to the buyer of the shares.

Documentation to convert Private Limited Company to One Person Company

1. E-Form MGT 14 is required to be filed with Registrar of Companies along with the below mentioned attachments:

• Certified true copy of the Special Resolution, so passed>
• Altered Memorandum of Association
• Altered Articles of Association
• Notice of Extra General Meeting (EGM), held to get the approval of Directors for the said conversion
• Certified true copy of Special Resolution
• Altered Memorandum of Association
• Altered Articles of Association
• Certified true copy of Board Resolution(optional in nature)

2. E-Form INC 6 – Application for the conversion of Private Limited Company to One Person Company:

• List of members and creditors of the company
• Latest balance sheet
• Letter of ‘No Objection’ from the members and creditors
• Affidavit from the Directors stating that all the members and creditors has consented for the conversion