A mutual fund can be voluntarily converted to a limited liability company by passing a special resolution after increasing the minimum number of members and directors to two. The conversion of a UCIs into a limited liability company does not require obtaining a written certificate of opposition (NOC) from creditors. Click here to learn more about converting a mutual fund to a limited liability company – cleartax.in/s/convert-opc-private-limited-company. The Companies Act, 2013 provides certain exemptions for the OPC from compliance. The OPC does not have to prepare the cash flow statement. The Secretary-General does not need to sign the books of account and annual declarations and is signed only by the Director. The only member of the company appoints a candidate when the company registers. This is a unique feature of UCIs that distinguishes them from all other types of businesses. A limited liability company is the form of company where at least two members are required and the maximum number of members can be 200. The liability of the partners of a limited liability company is limited to the number of shares they hold.
One Person Company (OPC) is a company founded by a single person. Before the 2013 Companies Act came into force, a single person could not start a business. If a person wanted to start their business, they could only choose a sole proprietorship, as there had to be at least two directors and two members to start a business. Applicants: UCIs are unique in that the only member of the company must mention a candidate when registering the company. The main difference between the two is the type of liabilities they carry. As an OPC is a separate legal entity from its sponsor, it has its own assets and liabilities. The promoter is not personally responsible for repaying the company`s debts. While a form of business for sole proprietorships may be very similar to one-man businesses, there are significant differences. The only difference between them is the liabilities they have. A OPC is an independent legal entity that is distinct from its sponsor. It has its own assets and liabilities. The debts of the company are not borne by the promoter.
Paragraph 3(1)(c) of the Act provides that the words “sole proprietorship” must appear in parentheses under the name of the corporation wherever it appears. Private companies: Under section 3 (1) (c) of the Companies Act, only one person may form a company for any lawful purpose. UCIs are also classified as private companies. According to Article 2 (62) of the Companies Act 2013, a company can only be formed with 1 director and 1 member. This is a form of business where compliance requirements are lower than those of a private company. There is no specific tax advantage for a UCIs compared to any other form of company. The tax rate is a flat rate of 30%, other tax provisions such as MAT & dividend distribution tax (DDT) apply as for any other form of company. Only natural persons who are Indian citizens and residents have the right to set up a sole proprietorship in India.
The same condition applies to UCIs candidates. In addition, such a natural person may not at any time be a member or candidate of more than one UCI. Sole proprietorship (CPO) refers to a corporation founded with a single person (alone) as a member, as opposed to the traditional method of having at least two members. It is the recognition of the economic unity of individuals that makes it easier for small traders and service providers to start business by expanding their possibilities through corporate identity. A single person may form a mutual fund by registering their name in the articles of association and complying with other requirements of the Companies Act 2013. This memorandum must contain the details of a candidate who becomes the sole member of the company in the event that the original member dies or is no longer able to establish contractual relations. Tax regulations will undoubtedly affect your business, as they have their own effects that your business cannot avoid. That`s why we`re here to inform you. In terms of execution, delivery and set-up costs […] Since the sole member can also be the director of the corporation, there will be no clear distinction between ownership and management. The single member can take and approve all decisions. The line between ownership and control is blurred, which can lead to unethical business practices. They no longer stress about coming up with a business name.
A list of available companies can be created using the Vakilsearch company name generator. The OPC has ownership of the eternal estate, even if there is only one member. During the integration of the OPC, the member must appoint a candidate. After the member`s death, the nominee manages the company in place of the member. The Companies Act 2013 revolutionized Indian company law by introducing many new concepts. One-person businesses have changed that. This factor has led to a new way of starting businesses. A business unit offers flexibility, protection and limited liability. The Companies Act 2013 provides that an individual may form a company with a single partner and a director. The administrator and the member can be the same person.
Thus, a sole proprietorship means a person who may be a resident, or NRI may start his or her business that has the characteristics of a business and the benefits of a sole proprietorship. Section 3(1)(c) of the Companies Act 2013 states that a company may be incorporated by a single person for any purpose recognised by law. UCIs continue to be referred to as private companies. Since only one person can set up and operate the OPC, it becomes easy to manage their affairs. It is easy to make decisions and the decision-making process is fast. Ordinary and special resolutions may be made by the member simply by recording them in the minute book and signed by the sole member. Thus, it is easy to manage and manage the business because there are no conflicts or delays within the company. It is easy to join the OPC since only one member and one candidate are required for inclusion. The member can also be the administrator.