How to convert an OPC into a Private Limited Company
Updated: Aug 20, 2021
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.
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 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
Convene a general meeting and pass a Resolution for an increase in the number of Directors and shareholders.
For converting an OPC to a Private Limited Company, there should be at least 2 shareholders and 2 directors.
Furthermore, shareholders shall pass a resolution for approving the alteration of the Memorandum of Association (MOA) and Articles of Association (AOA) of the OPC.
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.
Further file E-Form INC-6 on the MCA Website within 6 months of conversion.