CONVERSION OF PRIVATE LIMITED INTO OPC

CONVERSION OF PRIVATE LIMITED INTO OPC

A Private Limited Company can be converted into a One Person Company (OPC) to streamline management, reduce compliance, and consolidate ownership. This strategic move is ideal for solo entrepreneurs who want to simplify their business structure while retaining the advantages of a corporate entity, including limited liability and separate legal status.

Grow your business: Convert your OPC to a Private Limited Company

Is your One Person Company (OPC) ready for the next stage of growth? Converting to a Private Limited Company is a strategic move that can help you raise capital, bring in new partners, and scale your business.

With amendments made to the Companies Act in 2021, the conversion process is now completely voluntary. OPCs no longer face mandatory conversion based on exceeding turnover or paid-up capital limits. This means you can decide to upgrade your business structure whenever it aligns with your strategic goals, not because the law forces you to.

Reasons to convert your OPC

• Expansion: Allows for the introduction of new shareholders and directors to help you expand your business.
• Funding opportunities: Opens up more options for raising capital, including private equity and venture capital investments.
• Enhanced credibility: A Private Limited Company structure is often viewed as more credible by banks, suppliers, and potential investors.
• No financial restrictions: The removal of turnover and paid-up capital limits allows your OPC to grow indefinitely without a forced change in its legal structure.

Simplified conversion process (Voluntary)

The legal process to convert your OPC is straightforward and is managed entirely with the Ministry of Corporate Affairs (MCA).

Key requirements

• Minimum members and directors: The company must increase its members and directors to at least two.
• Special Resolution: The sole member must pass a Special Resolution approving the conversion.
• No-Objection Certificate (NOC): Obtain a written NOC from all company creditors.
• MOA and AOA alterations: The company's Memorandum of Association (MOA) and Articles of Association (AOA) must be amended to reflect the conversion.

Step-by-step procedure

1. Convene a meeting: Hold a Board Meeting to approve the conversion and the alteration of the company's MOA and AOA.
2. Pass a Special Resolution: The single member must pass a Special Resolution approving the conversion and necessary changes.
3. File with ROC: File e-Form MGT-14 with the Registrar of Companies (ROC) within 30 days of passing the Special Resolution.
4. File conversion application: Submit e-Form INC-6 to the ROC, along with all supporting documents, including the altered MOA/AOA, the Special Resolution, and the creditor NOCs.
5. Receive new certificate: Once the ROC is satisfied with the application and documents, they will issue a new Certificate of Incorporation.

Documents required

• Altered Memorandum of Association (MOA) and Articles of Association (AOA)
• Copy of the special resolution approving the conversion
• No-objection certificate (NOC) from company creditors
• List of proposed new members and directors, along with their consent
• The company's latest audited financial statements
• Affidavit from the directors confirming the consent of members and creditors