HOW TO CONVERT A PRIVATE COMPANY INTO OPC
An already registered private company can be changed into OPC (One Person Company) according to section 18 the Companies Act 2013. In any case, before conversion check for the following conditions specified under the Act and the guidelines:
- That the paid-up capital of the company to be converted to OPC should be less than Rs. 50 Lakhs.
- That the annual turnover of the company to be converted to OPC must be less than Rs. 2 crores during the past three consecutive financial years.
Note in case the company has not completed its tenure of 3 years then, then the turnover shall be reckoned from the date of its incorporation.
- The new OPC to be formed must have only one Natural Individual having Indian nationality as a shareholder
- The shareholder of the OPC to be formed must be a resident person.
Note that a person is treated to be resident if the stay of such person in India during immediately preceding one calendar year is more than 180 days.
- The shareholder of the new OPC to be formed must not have already incorporated any other OPC, or he should not be the nominee of any other OPC.
- A minor is not allowed to be a member or nominee of an OPC.
The procedure of conversion of Private Company to OPC
- Board meeting: A board meeting is required to be conducted in order to fix a date for calling the meeting of the shareholders (Extra Ordinary General Meeting). Notice to be served to the shareholders shall also be drafted along with the draft resolution. This resolution pertains to the special resolution to be adopted by the shareholder concerning the conversion of private limited to OPC in the general meeting.
- The notice: shall be served in accordance with the provisions of Section 101 of the Companies Act, 2013 all Members, Directors and the Auditors along with explanatory statement as well as the agenda, draft resolution to be passed as a special resolution.
- Obtain NOC from the creditors: The consent of all the creditors in the form of a No Objection Certificate should be obtained. Such consent obtained from creditors is to be placed before the EGM.
- Conduct the EGM: In accordance with the date decided in the Board meeting and notice served to conduct the EGM on the designated date, time and place. A special resolution is required to be passed at the EGM concerning the conversion & also the approval of altered MOA & AOA (Memorandum of association and Article of association).
- Filing of Resolution with the ROC: The special resolution passed at the EGM by the members must be filed with the ROC in Form No MGT-14, within 30 days from its date of passing along with prescribed attachments. Once the MGT-14 is approved, the ROC takes the resolution on its record.
- Filing of Application of Conversion: Once MGT-14 is approved file the application for conversion through Form — INC-6 with following attachments.
- Filing of form INC-6: The form for conversion of a private company to OPC shall be downloaded from the MCA site and to be filled and uploaded at the portal of MCA through CS or such authorised person of the company.