Conversion of Private Limited Company into One Person Company (OPC)

Any existing Private Limited Company (except a company registered under the Section 8 of the new Indian Companies Act of 2013), which could be engaged in any of the broad economic sectors of manufacturing or production, business & commerce, professions, and services, may opt for its conversion into a One Person Company (OPC), based on certain private, commercial, or managerial reasons. To help such private limited companies desirous of being converted into the one person companies, this web-page of ours internationally reputed law firm of Delhi, has been meticulously prepared.

The whole conversion procedure will be carried out in strict accordance with the rules and provisions given in the Section 18 of the Indian Companies Act of 2013, and the Companies (Incorporation) Rules of 2014 [CR-2014], particularly the sub-rules of the rule 7 of the CR-2014. For such a conversion, the applicant private limited company must have the total paid-up capital considerably less than Rs. Fifty Lacs (INR 50 Lacs), OR its Average Annual Turnover in Three immediately preceding financial years must be notably less than INR 2 Crores (Rs. 2 Crores). Here, it must be noted that in case the total paid-up capital of the desirous private limited company is in close vicinity to or equal to Rs. 50 Lacs; Or its average annual turnover being in close proximity to INR 2 Crores, then the newly formed OPC will again have to change itself to a private or public limited company in adjacent future [as per the rules 6(1 & 2) of the CR-2014]. Again, any such conversion of private limited company into one person company (opc) will not affect the prior debts, liabilities, or contracts of the private limited company; and these will be necessarily discharged by thus newly formed OPC also.

How to Convert Pvt Ltd Company into OPC

For forming an OPC, only One Director and One Shareholder/Subscriber, are needed; the director and shareholder can also be the same person. Again, a Nominee must be nominated at the time of registration in Form INC-3. The proposed director of the OPC must have DIN and DSC. Also, the director should be a citizen of India, or a resident of India who stayed at least 182 days in the immediately preceding financial year, anywhere in entire India. Lastly, there is no necessity to change the location or the registered office of the prior private limited company.

• The existing private limited company is compelled to call a general meeting of the company, for passing a special resolution for the purpose of its conversion into a one person company. Proof of No Objection from all members and creditors, must be taken in written form prior to passing such a resolution. Again, a copy of this special resolution is to be sent to the concerned ROC within Thirty days of its occurrence in Form MGT-14.
• Making requisite alterations in the MOA and AOA of the ceasing private limited company as per the provisions given in the Section 18 of the CA-2013, read with the Section 122 of the Act.
• Then, the concerned members of the expiring private limited company have to file Form INC-6, which is the application for conversion into one person company, along with the fees given in the Companies (Registration Offices and Fees) Rules of 2014. The following documents are to be attached with this Form INC-6:
  • A solemn declaration of the proposed director of the emerging OPC, by way of an affidavit that all members and creditors of the private limited company have given their independent consent to the issue of conversion, and also that the Pvt. Ltd company has a paid-up capital less than Fifty Lacs, and its average annual turnover in the specified period less than Two Crores, at the time of its conversion into the OPC.
  • Separate listings of the members and creditors
  • The latest well-audited balance sheet, and the profit and loss accounts
  • Proof of No Objection in written form from all creditors

After observation and verification of the documents and facts extended to, the ROC will issue the certificate of conversion only after being fully satisfied.