Conversion of OPC into Pvt Ltd Company in India

Procedure for Conversion of OPC into Pvt Ltd company

Board Meeting and Resolution

• Call a Board Meeting to decide on converting the One Person Company (OPC) into a Private Limited Company. Pass a Special Resolution approving:
• The voluntary conversion of OPC into a Private Limited Company.
• Changes to the Memorandum of Association (MoA) and Articles of Association (AoA).
• Increasing the number of directors as a Private Limited Company must have at least two directors.

Filing Forms with the ROC

• File Form DIR-12 to add at least one more director to the company.
• File Form MGT-14 with the Registrar of Companies (ROC) within 30 days of passing the special resolution.
• Attach the revised MoA and AoA.
• Include a copy of the special resolution.

Note: Ensure you have appointed a second director before filing MGT-14 as a Private Limited Company must have at least two directors.

Filing INC-6 for Final Conversion

After submitting MGT-14, file Form INC-6 within the next 30 days to apply for conversion officially. Company has to attach the below documents along with the form;

• NOC from creditors (if applicable).
• Affidavit from the existing member (declaring their consent for conversion).
• Any additional supporting documents (if required).

Registrar’s Approval and New Incorporation Certificate

The ROC will review the entire application extensively. Once it verifies the information and documents, it will make the decision. If there is no error found, ROC will issue the certificate of conversion.

What documents are required for conversion?

• The list of creditors and members.
• Current audited balance sheet and profit and loss account.
• A copy of No-Objection Certificate (NOC)
• An affidavit which confirms; all members and creditors have consent for conversion, Company’s paid-up share capital less than ₹50 lakhs, Its average turn over is less than ₹2 crore.
• The nominee’s consent
• Proof of residence and identity of nominee or member

Benefits of conversion of OPC into Pvt Ltd company

Separate Legal Entity

A Private Limited Company is a separate legal entity, meaning it can own property, make decisions, sue, and be sued in its own name. Assets and liabilities of both companies and directors are different.

Tax Benefits

A Private Limited Company is eligible for several tax benefits, such as deductions for business expenses and lower tax rates, which are beneficial for an individual.

No minimal paid capital

After the changes of the companies act, 2013, Pvt Ltd Companies does not require a minimal paid-up capital. It can be registered with a nominal authorized share capital.

Key Consideration

• A private limited company requires a minimum of two directors and two shareholders.
• New director must obtain DSC (Digital SIgnature Certificate) and DIN (Director Identification Number).
• Must update company records with PAN, GST and other registrations.

Conclusion

Conversion of OPC into Pvt Ltd company provides better growth opportunities and legal advantages. With the ability to have multiple directors and shareholders, a company can attract more investment and expand the operations in the business world. Once the company is converted, it starts getting benefits like separate legal identity, taxation benefits, and no minimal capital requirement. A private Limited company is ideal for businesses planning to grow and operate on a larger scale.

Suggested Read :

AGM Provisions for OPC

Voluntary vs Involuntary Strike Off

Tax Structures for Pvt ltd Company

LLP Vs Private limited company

Legal Consequences of Strike Off OPC

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