Conversion of a Private Limited Company to an OPC

Conversion of a Private Limited Company to an OPC: Conditions

A natural person should be eligible to join the new OPC
The new OPC should be open to Indian citizens and anyone who has spent 120 days in India in the previous financial year
A member of the OPC cannot be a member of another OPC or a nominee for another OPC
OPC is not open to minors
OPCs should not be set up as Section 8 companies.

Conversion of a private company into an OPC

can be formed by converting a private company as follows:

Hold a board meeting
Meeting of the board
Call for the EGM
Creditors’ NOC
Hold an EGM
Fill out the RoC form
Issuance of share certificates

1. Hold a board meeting

A meeting notice should be sent to all board members at least 7 days before the meeting. An agenda should be included in the notice.

2. Meeting of the board

There are several reasons why the board of directors should meet:

Converting a private company into an OPC requires board approval
There will be a decision made about the date, location, time, and day of the extraordinary general meeting
Approval of the EGM notice, agenda, and explanation
A director may issue the approved notice of the EGM.

3. Call for the EGM

In the event of an EGM, the company’s members, directors, and auditors will be notified. EGM notices should be sent at least 21 days prior to the EGM date.

4. Creditors’ NOC

During the EGM, the company should request a no-objection certificate (NOC) from the existing shareholders and creditors. Written no-objection certificates (NOCs) are required.

5. Hold an EGM

We will hold the EGM for the following reasons:

Check if a quorum is present at the meeting.
The auditor of the company should be present. Check if a leave of absence has been granted if not present, based on Section 146 of the Companies Act, 2013.

6. Fill out the RoC for

When converting a private company into a one-person company (OPC), certain e-Forms must be submitted to the registrar of companies (RoC). These forms include the following:

Form MGT-14

Once the EGM passes the special resolution, Form MGT-14 should be filed with the RoC. Form MGT-14 should be filed with RoC within 30 days of the special resolution’s passing. Attachments should accompany Form MGT-14:

A copy of the EGM notice and its explanation
Certified copy of the special resolution
The amended Memorandum of Association (MoA) and Articles of Association (AoA) of the company
Certified copy of the board resolution.

In order to file Form INC-6, Form MGT-14 must first be filed.

Form INC-6

The application for the conversion of a private company into an OPC should be filed with the RoC. An INC-6 form must be filed with the application, along with the following attachments:

A list of all creditors and members
A Recent balance sheet of the company
Here is a copy of the letter of no objection
An affidavit of the directors of the company stating that all creditors and shareholders have consented to the conversion of a private company to an OPC, that the company’s paid-up capital is less than *50 lakh, and that its turnover is less than ₹2 crores.

7. Issuance of share certificates

The registrar of companies will review all the e-Forms and attachments submitted by the private company to convert them into an OPC. An RoC should issue a share certificate for the conversion of a private company into an OPC if the registrar of companies is satisfied that the Private limited Company has met the statutory requirements.

Conclusion

A one-person company (OPC) is much easier to manage with fewer compliance requirements than a private company. Most of the employees of a private company will benefit from the conversion into an OPC. It is difficult and time-consuming to convert a private company into an OPC. At Vakilsearch, we have skilled experts who can help you convert a private company into an OPC. You can trust us to do the job right.

PenceHensel