CONVERSION OF ONE-PERSON COMPANY TO PRIVATE LIMITED COMPANY
GAA Consulting
Our firm of company secretaries specialises in offering advising and compliance services related to corporate law.
A one-person company (OPC) can be legally converted into a different kind of company by changing its sole shareholder structure. Depending on a few conditions, this conversion may be required or elective. For OPCs and their shareholders to successfully traverse the legal processes and guarantee compliance with the pertinent Companies Act 2013 and other applicable laws, they must comprehend the conversion process. An OPC can explore new business options, improve its growth potential, and adjust to its changing demands by going through the conversion process.
A One Person Company (OPC) may become a Private Limited Company under the Companies Act of 2013 by either a required or voluntary conversion, depending on the circumstances.
A? one-person company that has been incorporated cannot be changed into a Private Limited Company until after it has been in existence for two years. However, if two years from the date of establishment have passed, it may choose to voluntarily convert to a private limited company. The process for this conversion will follow the guidelines established by Rule 7(4) of the Companies (Incorporation) Rules, 2014 and Section 18 of the Companies Act, 2013.
The memorandum and articles of the company may be altered in order to undergo conversion, in accordance with section 18 of the Companies Act of 2013. After registering the documents mentioned in sub-section (1) as its first registration, the Registrar will, upon the company's request, close the previous registration and issue a new certificate of incorporation, provided that this registration will not impact any obligations, debts, liabilities, or contracts entered into or incurred.
A one-person firm must be converted into a private limited or public limited company as soon as its paid-up capital reaches or surpasses Rs. 50 lakhs, or if its annual turnover for the relevant fiscal year exceeds Rs. 2 crores.
In accordance with Rule 7(4) of the Companies (Incorporation) Rules 2014, a private company, excluding section 8 companies, may become an OPC by passing a special resolution at the general meeting if it has paid up share capital of Rs. 50 lakhs or less or if its average annual turnover for the relevant period is Rs. 2 crores or less.
No issues Before approving such a resolution, the company's creditors and members must provide a certificate. Within thirty days of the resolution being passed, the corporation must file a copy of the resolution in form MGT-14. The company must submit an application in Form INC-6 together with the necessary costs for its conversion to OPC.