BBNC

Conversion of OPC to Pvt Ltd


A newly established Private Limited Company shall discharge the conversion of an OPC-One Person Company into a Private Limited Company as per Section 18 of the Companies Act, 2013 and the requirements of the Companies (Incorporation) Rules of 2014. The OPC's current debts, liabilities, obligations, or contracts will not be affected by these provisions.
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Overview

Converting an OPC to a private limited company can be done either voluntarily or mandatorily. The prerequisites for both types of conversions are necessary changes to the OPC's MOA and AOA (As per the provisions provided in section 18 of the Companies Act, 2013, along with section 122 of the Act).

The section states that the relevant members and creditors must submit no written objections; that a resolution in favour of conversion must be passed; and required minimum number of members and directors must be met.

  1. Voluntary Conversion
    For converting to a private limited company, OPC is required to have 2 directors and 2 members.
    Within sixty days, OPC must notify a registrar of companies of its voluntary conversion using form INC 5.

  2. Mandatory/Compulsory Conversion
    This is a situation in which you must convert an OPC to a private limited Company.
    It is mandatory to convert if an OPC has a paid-up share capital of more than Rs. 50 lakhs and a yearly turnover of more than Rs. 2 crores in the previous three financial years.
    Within 6 months of the date on which the paid-up share capital exceeds 50 lakhs rupees or the final date of the relevant period in which the average annual turnover exceeds 2 crore rupees, such a company must change to a private or public limited company.
    Simply approving a special resolution in the general meeting is all that is required to convert. Before the resolution is passed, it is reviewed for a written No Objection Certificate from the creditors and other members.



Benefits of Conversion of OPC to Pvt Ltd

Easier to Raise Funds

Raising funds as a private limited company is a relatively simple process because it allows for the sale of shares and offers a variety of funding options such as private equity, ESOPs, and more.

Taxation Benefits

Because a one-person company is not recognised under the Income Tax Act, it has been lumped in with other businesses for tax purposes. Private businesses have been taxed at a rate of 30% on their overall earnings. As a result, from a taxes standpoint, the notion of a One Person Company becomes less lucrative since it imposes a high financial burden.

Checklist/Requirements

  1. PAN Card of shareholders and Directors
  2. Voter ID/ Passport/ Driving License of Shareholders and Directors
  3. Duly certified copy of latest audited Financial Statements
  4. Certificate of Incorporation
  5. MoA & AoA

Process of Conversion of OPC to Pvt Ltd

Step 1: Collection of basic information & documents

Step 2: Application of DSC, DIN of new director

Step 3: Drafting of necessary resolutions

Step 4: Drafting of other required documents & affidavit

Step 5: Alteration of MoA & AoA

Step 6: Online filing of form INC – 6 for conversion

Conversion of One person company to Private limited company

Why Choose Us

  Entrepreneur Friendly

We make the process so easy and fast that you will not even feel the headache of all the paperwork, and our professionals will provide you all the promised deliverable within a given span of time.

  Experienced Professionals

All our professionals are qualified and specialized in that particular work. Making sure no mistakes are done at the time of filings with the authorities so that company won’t have to pay any penalties due to mistakes.

  One Stop for All Your Requirements

We support you throughout the journey of your business, from the incorporation, Accounting and taxation support, Secretarial compliance support, and Legal support.

  Cost-Effective

We believe that cost plays a vital role in any company’s growth stage, that’s why we do not surprise our clients with hidden charges, you pay what you see in the initial proposal.


Frequently Asked Questions


What is the effect after conversion of OPC to a private limited company on the liabilities of the previous company?
The company's responsibilities, debts, or obligations will not be altered in any manner following the conversion. As a result, the firm is responsible for all of its prior commitments.
The One person Company cannot be converted directly into the Limited Liability Partnership Form. Because an OPC company has only 1 member. Likewise, in case of LLP registration it should have at least 2 persons who shall on conversion and they become partners of LLP.
OPC cannot be incorporated or converted into a section 8 company under the Act. 3. OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporates.