One Person Company to convert itself into a public company or a private company in certain cases.
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Following are certain cases where One Person Company need to convert itself into to a public company or a private company:-
1. (i) Where the paid up share capital of an One Person Company seceeds fifty lakh repees [or less] and
(ii) its average annual turnover during the relevant period exceeds two crore rupees, it shall cease to be entitled to continue as 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 sevven members and three directors in accordance with the provisions of section 18 of the Act.
3. The OPC 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 necesssary changes incidental thereto.
4. The OPC 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 its has ceased to be a OPC 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).
Explanation- For the purposed of this rule, " relevant period" means the period of immediately preceding three consecutive financial years;
5. If OPC or any officer of the OPC contravenes the provisions of these rules, OPC or any officer of the OPC shall be punishable with fine which may extend to ten thounsand rupees and with a further fine which may extend to R. 1000 for every day after the first during which such contravention continues.
6. A OPC can get itself converted into a Private or Public company after increasing the minimum number of members and directors to two or minimum of seven members and two or three directors as the case may be, and by maintaining the minimum paid-up capital as per requirements of the Act for such class of company and by making due compliance of section 18 of the Act for conversion.
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