How to convert an OPC into a Private Limited Company

An OPC can be converted into a Private Limited Company either voluntarily or mandatory. Take a look at the detailed explanation of both the type of Conversions.

Voluntary Conversion

An OPC can be converted into a Private Limited Company before it satisfies the criteria mentioned below

A-One Person Company can be converted into a Private Limited

• Company after two years from the incorporation

• If more than one Director is appointed in a company then a board meeting will be required to convert an OPC into a Private Limited Company.

Mandatory Conversion

Mandatory conversion is required in case a One Person Company meets the parameters mentioned below:

• If the paid-up capital of an OPC is beyond Rs.50 lakh

• The average turnover of the immediate preceding three consecutive years is beyond Rs. 2 crores.

Thus, in either of the cases, a One Person Company needs to get converted into a Private Limited Company within six months.

The conversion is done by passing a special resolution in the General Meeting. A NOC is required from the creditors and the other members before the resolution is passed.

Documents Required for Conversion

• The directors of the company should be given a declaration by an affidavit that confirms that all the members and directors are have provided their consent for the conversion.

• The list of members and the creditors

• The recently audited Balance sheets and the profit and loss accounts

• A copy of the NOC of secured creditors

Process for Compulsory Conversion

1. Convene a general meeting and pass a Resolution for an increase in the number of Directors and shareholders.

2. For converting an OPC to a Private Limited Company, there should be at least 2 shareholders and 2 directors.

3. Furthermore, shareholders shall pass a resolution for approving the alteration of the Memorandum of Association (MOA) and Articles of Association (AOA) of the OPC.

4. File E- form INC-5 with ROC within 60 days of exceeding threshold limits, informing that it has ceased to be OPC. And now it requires to convert itself into a private company.

5. Further file E-Form INC-6 on the MCA Website within 6 months of conversion.