DIVESH GOYAL

Mob: +918130757966
csdiveshgoyal@gmail.com

Practicing Company Secretary

GOYAL DIVESH& ASSOCIATES

PROCESS FOR CONVERSION OF OPC INTO PRIVATE

LIMITED COMPANY
SERIES NO

81

GOYAL DIVESH & ASSOCIATES,

Practicing Company Secretary
"Everything is easy, if you are crazy about it And
Nothing is easy, when you are lazy about it."
BACKGROUND:

CONTENT OF ARTICLES
A. Background
B. Method of Conversion of OPC
into Private Limited Company.
C. Process of Mandatory Conversion
of OPC into Private Limited
Company
D. Penalty
E. Process of Voluntary Conversion
of OPC into Private Limited
Company.
F.

Post Conversion Requirements.

The Introduction of One Person Company

into the legal system is a move that would
encourage the entrepreneurs enters into
corporate world. This will not only enable
individual capabilities to contribute economic
growth, but also generate employment
opportunity. OPC of sole-proprietor and
company form of business has been provided
with concessional /relaxed requirements under
the Companies Act, 2013.
The concept of OPC is still in its nascent stages
in India and would require some more time to
mature and to be fully accepted by the business
world. With passage of time, the OPC mode of
business organization is all set to become the
most preferred form of business organization
especially for small entrepreneurs.

One most important feature of OPC is that the risks mitigated are limited to the extent of the
value of shares held by such person in the company

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DIVESH GOYAL

Mob: +918130757966
csdiveshgoyal@gmail.com

Practicing Company Secretary

GOYAL DIVESH& ASSOCIATES

There is TWO METHOD for conversion of OPC into Private Limited Company:
1. Mandatory Conversion of OPC into Private Limited Company.
2. Voluntary Conversion of OPC into Private Limited Company.

A. Mandatory conversion of OPC into Private Limited:

As per Rule 6 of The Companies (Incorporation) Rules, 2014:- Conversion of One Person
Company to Private Limited Company is mandatorily required under the Companies Act, 2013.
Mandatory conversion of One Person Company to Private Limited Company is required in case
a One Person Company meets certain parameters
a) Effective date of increase in the paid-up share capital of a One Person Capital beyond
rupees fifty lakhs AND
b) Increase of average annual turnover during the period of immediately preceding three
consecutive financial years is beyond rupees two crores.
In the above case, the One Person Company shall be mandatorily required to convert itself into
either a private or a public company Within a Period of Six Months. In this article, we look at
the procedure for conversion of one Person Company into a private limited company or limited
company.

STEPS TO BE TAKEN FOR CONVERSION OF ONE PERSON

COMPANY
Process for conversion is given in as Rule 6 of the Companies (Incorporation) Rules, 2014
S. No.
A.

STEPS

ACTION

BOARD MEETING

ISSUE NOTICE in accordance with the provisions of

section 173(3) of the Companies Act, 2013, for
convening a meeting of the Board of Directors. Main
agenda for this Board meeting would be:
AGENDA :

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DIVESH GOYAL

Mob: +918130757966
csdiveshgoyal@gmail.com

Practicing Company Secretary

GOYAL DIVESH& ASSOCIATES

To discuss with directors that Company has crossed the

Limits as given above and there is need to mandatory
conversion of OPC into Company.
Pass Board resolution for increase in No. of Directors.
(Minimum 2 Directors)
Pass a board resolution to get in principal approval of
Directors for increase shareholder of the Company.
(Minimum 2 Share holders)

Pass Resolution to get shareholders approval for
Alteration in MOA & AOA of Company.

There is required to pass Share holder resolution. But as per Section 122(1) there is no
need to hold EGM by OPC, it shall be sufficient if, in case of OPC, the resolution is
communicated by the member of the company and entered into the minutes books
required to be maintained u/s 188 and signed and dated by member and such date shall
be deemed to be the date of the meeting for all the purpose under this Act.
D.

ROC FORM FILING

For conversion of OPC in Company few E-forms will be

filed with concerned Registrar of Companies at different
stages as per the details given below:

E- Form INC-5

As per Rule 6(4) The Companies (Incorporation) Rules,

2014:
OPC within 60 days from the period when Condition as
mentioned above attract give notice to ROC informing
that it has ceased to be OPC and that it is now required to
convert itself into a private company or public company.

ATTACHMETN:
I. Certified true copy of board resolution where person
giving notice has been authorized

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DIVESH GOYAL

Mob: +918130757966
csdiveshgoyal@gmail.com

Practicing Company Secretary

GOYAL DIVESH& ASSOCIATES

II. Copy of the duly attested latest financial statements

III. Certificate from a Chartered Accountant in practice
for calculation of average annual turnover during
the relevant period This certificate is mandatory to
attach if the threshold limit is exceeded on account
of average annual turnover.
IV. Any other information can be provided as an
optional attachment(s).
E- Form INC-6

As per Section 18 of CA-2013

OPC within 6 Month from the date of exceeding of
threshold Limits.

ATTACHMETN:
I. Certified true copy of board resolution where person
giving notice has been authorized
II. Altered copy of MOA & AOA.
III. Copy of the duly attested latest financial statements
IV. Certified true copy of Special resolution where
person giving notice has been authorized
V. Any other information can be provided as an
optional attachment(s).
Duty of ROC:
Concerned Registrar of Companies (ROC) will check the E-forms and attached
documents filed by the Company for Conversion of Private Company into One Person
Company (OPC). On being satisfied that Company has complied with prescribed
requirements the Registrar shall issue the Certificate to the effect of Conversion of
Private Company into One Person Company (OPC).

PENALTY:
If One Person Company or any officer of the One Person Company contravenes the provisions
of these rules, One Person Company or any officer of the One Person Company shall be
punishable with fine which may extend to ten thousand rupees and with a further fine which

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DIVESH GOYAL
Practicing Company Secretary
GOYAL DIVESH& ASSOCIATES

Mob: +918130757966
csdiveshgoyal@gmail.com

may extend to one thousand rupees for every day after the first during which such
contravention continues.

B. Voluntary conversion of OPC into Private Limited:

When a One Person Company gets incorporated, it cannot convert itself to
Private or Public company for a period of not less than two years from the
date of incorporation.

If the time period has elapsed and two years time period is over, a One
Person Company can apply for converting itself to Private Limited
Company or Public limited company.

The Conversion process should be done as per the rules and regulations laid
down by the Companies Act, 2013 under Section 18, and Rule 7(4) of the
Companies (Incorporation) Rules, 2014.

Section 18 of the Companies Act, 2013:

A company of any class registered under this Act may convert itself as a
company of other class under this Act by alteration of memorandum and
articles of the company in accordance with the provisions of this Chapter.

Where the conversion is required to be done under this section, the Registrar
shall on an application made by the company, after satisfying himself that
the provisions of this Chapter applicable for registration of companies have
been complied with, close the former registration of the company and after
registering the documents referred to in sub-section (1), issue a certificate of
incorporation in the same manner as its first registration.

The registration of a company under this section shall not affect any debts,
liabilities, obligations or contracts incurred or entered into, by or on behalf of
the company before conversion and such debts, liabilities, obligations and

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DIVESH GOYAL

Mob: +918130757966
csdiveshgoyal@gmail.com

Practicing Company Secretary

GOYAL DIVESH& ASSOCIATES

contracts may be enforced in the manner as if such registration had not been
done.

STEPS TO BE TAKEN FOR CONVERSION OF ONE PERSON

COMPANY
Process for conversion is given in Section 18 of Companies Act, 2013 and Rule 7(4) of the
Companies (Incorporation) Rules, 2014 which are reproduced for your reference:
S. No.
B.

STEPS
BOARD MEETING

ACTION
ISSUE NOTICE in accordance with the provisions of
section 173(3) of the Companies Act, 2013 and SS-I for
convening a meeting of the Board of Directors. Main
agenda for this Board meeting would be:
AGENDA :

To discuss with directors that Company want to
convert into OPC into Private Limited Company.

Pass Board resolution for increase in No. of Directors.
(Minimum 2 Directors)

Pass a board resolution to get in principal approval of
Directors for increase shareholder of the Company.
(Minimum 2 Share holders)

Pass Resolution to get shareholders approval for
Alteration in MOA & AOA of Company.

There is required to pass Share holder resolution. But as per Section 122(1) there is
no need to hold EGM by OPC, it shall be sufficient if, in case of OPC, the resolution
is communicated by the member of the company and entered into the minutes books
required to be maintained u/s 188 and signed and dated by member and such date
shall be deemed to be the date of the meeting for all the purpose under this Act.
E.

ROC FORM FILING

For conversion of OPC in Company few E-forms will be

filed with concerned Registrar of Companies at different

Contact On csdiveshgoyal@gmail.com For Any Query Or Question Or Suggestions

DIVESH GOYAL

Mob: +918130757966
csdiveshgoyal@gmail.com

Practicing Company Secretary

GOYAL DIVESH& ASSOCIATES

stages as per the details given below:

E- Form INC-6

As per Section 18 of CA-2013

OPC within 30 days of passing of Special Resolution file
form with ROC.

ATTACHMETN:
VI. Certified true copy of board resolution where
person giving notice has been authorized
VII. Altered copy of MOA & AOA.
VIII. Copy of the duly attested latest financial statements
IX. Certified true copy of Special resolution where
person giving notice has been authorized
X. Any other information can be provided as an
optional attachment(s).
Duty of ROC:
Concerned Registrar of Companies (ROC) will check the E-forms and attached
documents filed by the Company for Conversion of Private Company into One
Person Company (OPC). On being satisfied that Company has complied with
prescribed requirements the Registrar shall issue the Certificate to the effect of
Conversion of Private Company into One Person Company (OPC).

POST CONVERSION REQUIREMETNS

A.

Arrange new PAN No. of the company

B.

Arrange new stationary with new name of the Company

C.

Update company bank account details

D.

Intimate all the concerned authorities like Excise and sales tax etc about the
status change

E.

Printed copy of new MOA & AOA.

Contact On csdiveshgoyal@gmail.com For Any Query Or Question Or Suggestions

DIVESH GOYAL
Practicing Company Secretary
GOYAL DIVESH& ASSOCIATES

Mob: +918130757966
csdiveshgoyal@gmail.com

IMPORTANT POINT TO BE KEPT IN MIND WHILE CONVERSION

Only a natural person who is an Indian citizen and resident in India shall be eligible
to act as a member and nominee of an OPC.

resident in India" means a person who has stayed in India for a period of not less
than one hundred and eighty two days during the immediately preceding one
financial year

A person can be member in only one OPC.

Where a natural person, being member in One Person Company becomes a member
in another OPC by virtue of his being a nominee in that OPC, then such person shall
meet the eligibility criteria of being a member in only one OPC within a period of
one hundred and eighty days, i.e., he/she shall withdraw his membership from
either of the OPCs within one hundred and eighty days.

This brief write up an attempt has been made to unlock the technicalities related to
Conversion of Private Company into One Person Company prescribed under Companies
Act, 2013. I believe that the procedure for Conversion of Private Limited Company into One
Person Company through this article would be of some help for you all.
Conversion of status of company from private to OPC would become effective form the date
of receipt of the approval of the Registrar through the change of name would become
effective on the issue of fresh Certificate of Incorporation.
The Companies Act, 2013 was expected to simplify the provisions but on the contrary it
brought lot of restrictions on doing business. Therefore the private companies are
converting themselves into One Person Company.
A One Person company can be easily managed with less compliance to be followed,
conversion of the Sole Proprietor firm or Partnership or Private Limited Company to One
Person Company would benefit most people.

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