Conversion of Private Limited Company into One Person Company (OPC)

Private limited companies have a minimum of 2 to 200 shareholders whereas a One Person Company (OPC) can have only one shareholder. Converting a Private Limited company into OPC can have many reasons such as financial loss, partner disputes or shareholders deciding to quit. If a private company wanted to decrease the paperwork then opt for the OPC as it has less paperwork. The Companies Act 2013 provides a provision for converting the private limited company to OPC. Bizfoc is here to assist you with the conversion of a Private limited company to OPC under expert guidance.

What is Conversion of Private Limited Company into OPC

Private limited companies have a minimum of 2 to 200 shareholders whereas a One Person Company (OPC) can have only one shareholder. Converting a Private Limited company into OPC can have many reasons such as financial loss, partner disputes or shareholders deciding to quit. If a private company wanted to decrease the paperwork then opt for the OPC as it has less paperwork. The Companies Act 2013 provides a provision for converting the private limited company to OPC. Bizfoc is here to assist you with the conversion of a Private limited company to OPC under expert guidance.

Conditions for Conversion of Pvt Limited to OPC

• The member of the One Person Company should be a natural person.
• The member should be an Indian citizen of a new OPC. The person needs to stay a minimum of 120 days in the previous financial year.
• A member should be 18 years old to be a part of OPCs.
• For conversion of Pvt Limited into OPC, it should not be registered as a Section 8 company.
• OPC members should not be a member of any other OPC or be a nominee of any other OPC.

Documents Required for Conversion of Private Limited Company into OPC

These documents are mandatory for converting a Private Limited company into One Person Company (OPC):

For Form MGT-14:

• EGM notice with explanatory statement
• Special resolution copy
• Altered MOA and AOA
• Board resolution copy

For Form INC-6:

• List of creditors and members
• Latest balance sheet
• NOC from secured creditors
• NOC from creditors and members
• Affidavit confirming consent of creditors and members

Process of Conversion of Private Limited Company Into OPC

The Private Limited company needs to follow these steps to convert into a One Person Company in India:

Step 1- Hold Board Meeting:

A notice should be sent to all the company members at least 7 days before the board meeting date. In this meeting, the agenda should be mentioned in the notice.

The agenda of the board meeting should be:

• Planning the date, place, day, and time of the EGM (Extraordinary General Meeting)
• Getting approval for conversion of the Private company into OPC from the company's director
• Approval of the EGM notice with its agendas

Step 2- Plan for Extraordinary General Meeting (EGM):

The notice or invitation of EGM needs to be circulated at least 21 days before the scheduled date of the meeting among all the directors, members, and auditors.

Step 3- Get a No Objection Certificate (NOC) from Creditors:

Obtain a NOC (No Objection Certificate) from the existing creditors and shareholders of the company before passing a special resolution in the EGM. NOC serves as a written confirmation from all the creditors and shareholders that they have no objection to converting the Pvt Limited company into OPC.

Step 4- Hold Extraordinary General Meetings (EGM):

The EGM must be conducted on the prescribed date, time, and address as per the notice. This must include the following purposes:

• Check the quorum of the meeting
• Check the presence of the company auditor
• Pass a special resolution

Step 5- Filing of Relevant Form to ROC:

The company must file Form MGT-14 with the ROC within 30 days of passing the special resolution to convert your company. The company also needs to file Form INC-6 along with the required documents.

Step 6- Issuance of Certificate:

ROC will verify the applicant's e-forms and submitted documents. If the ROC verifies your application, then he/she will issue the certificate for the conversion of the private company into OPC. This certificate serves as a legal document showing the company’s status and confirms the ownership of shares in the newly converted OPC. It is a vital record that reflects the transition from a private company to an OPC.

Post Conversion Requirement of Converting a Company into OPC

After converting a Private Limited company into One Person Company (OPC), the company must ensure all legal and operational compliance, maintain the record, and fulfill these post-conversion requirements:

• Apply for the new PAN card of the OPC as the private limited company PAN card will no longer be valid now. A PAN card is a necessary document for the company's financial transactions.
• Arrange all the new stationery for the OPC such as letterheads, invoices, and other official documents with the new name and information of the OPC.
• Inform the bank about the conversion and update all the bank details according to the OPC. This is important to ensure smooth banking operations.
• Inform all the important authorities about the company's transformation, including the Goods and Services Tax (GST) department and any other regulatory department according to the business.
• Get a printout of the Memorandum of Association (MOA) and the OPC Articles of Association (AOA).

Fees for Conversion of Private Limited Company into OPC

If you are looking to convert your Private Limited company into OPC, then contact us for our professional support. Our professionals charge a minimum fee of ₹ 9,999/- for the conversion of a Private Limited company into OPC, exclusive of any government fees.

Time Taken for Conversion

Bizfoc has qualified and experienced team members who will guide you throughout the conversion process. Conversion of a Private Limited company into an OPC is a time-consuming process that will take at least 3-4 weeks.

Why Choose Bizfoc?

If you are seeking to convert a private limited company into an OPC, then you need to contact a reliable professional who can transform your business without any hassle. So, you don’t need to worry about it anymore as Bizfoc will transform your business with their professional experts within a minimum time. They also help you to understand all the processes, benefits, and documentation of this conversion.

Conclusion

The one-person company can be easily controlled as it has less compliance compared to a Private limited company. The conversion of a Private limited company into an OPC will be beneficial as there is only one decision-maker and less paperwork. You need to contact Bizfoc for the conversion of a Private limited company into an OPC as it is a complicated and time-consuming process.

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