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Compliance Xero
Conversion of OPC into Private Limited: Law, Compliance Checklist and Stepwise Procedure
Conversion of OPC into Private Limited: Law, Compliance Checklist and Stepwise Procedure
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Conversion of OPC into Private Limited: Law, Compliance Checklist and Stepwise Procedure. INTRODUCTION: The Companies Act 2013 introduced the concept of One Person Company (OPC) to boost small entrepreneurs/sole proprietorship firms to form small and marginal companies which will have the advantage of corporate structure with minimal legal compliance. OPC is a short term used for One Person Company. As the name reflects, OPC is a type of Company in which one sole person can hold the entire share capital of OPC as its member; however it can have more than one director. As per Section 2(63) of the Companies Act 2013 "One Person Company” means a company which has only one person as a member. Only a natural person (not being a minor) is eligible to form OPC in India. It is not allowed to carry out Non-Banking Financial Investment activities including investment in securities of any body corporate. A OPC can convert itself anytime into company of other class i.e a private or public limited company except Section 8 Company We shall discuss in this Article MCA Update on recent amendments in OPC, Governing laws, Benefits, Checklist, Procedural aspects for Conversion of OPC into Private Company. MCA UPDATE ON RECENT AMENDMENTS ON OPC: (Amendment effective from 1st April 2021) MCA has notified the following amendments for catering the growth of OPCs. Now NRIs can form OPC in India. The period of 120 days shall be counted instead of 182 days for residence status in India. Requirement of expiry of 2 years from the incorporation for voluntary conversion of OPC into any class of company has been done away with. Threshold Limit of Paid-up Capital exceeding Rs 50 Lakhs or Turnover exceeding Rs 2 Crores for Compulsory Conversion of OPC into any class of company has been deleted. E-Form INC-5 for intimation of Notice to ROC that it has ceased to be OPC has been deleted. Now only Form INC-6 can be used for both-Conversion from OPC to Private/Public or Private/Public to OPC. GOVERNING SECTIONS FOR CONVERSION OF OPC INTO PRIVATE LIMITED SECTION PARTICULARS EXPLANATION Section 18 of the Companies Act 2013 Conversion of Companies Already Registered. A company of any class registered under the Companies Act 2013 may convert itself as a company of other class under this Act by altering Memorandum and Articles of the company. Rule 6 of the Companies (Incorporation) Rules,2014 [Amended as per Companies (Incorporation) Second Amendment Rules, 2021 dated 1st February 2021]- Effective from 1st April 2021 Conversion of One Person Company into a Public Company or a Private Company A OPC can convert itself into a Private or Public Company, other than section 8 after increasing the minimum number of members and directors to 2 or 7 members and 2 or 3 directors, as the case may be, and maintaining the minimum paid-up capital as per the requirements of the Act for such class of company and by making due compliance of section 18 of the Act for conversion. The Company has to file application in E -Form No.INC-6 for its conversion into Private or Public Company. BENEFITS OF CONVERSION OF OPC INTO PRIVATE COMPANY: The number of Members can be increased from one (1) up to the maximum limit of Two Hundred (200) Easy to get Funding from Large Investors/Entrepreneurs Better Management Global Expansion of Business Favorable Taxation Benefits Trust/Credibility in eyes of Bankers, Suppliers, Customers and other Stakeholders Easier to get Loan from Bank Attractive mode of receiving Foreign Investments No mandatory requirement of appointment of Nominee Easy Transferability of shares to other persons COMPLIANCE CHECKLIST AND PROCEDURAL ASPECTS: Sr. No PARTICULARS REQUIREMENTS 1. DRAFT ALTERED MEMORANDUM OF ASSOCIATION Prepare a draft of new Memorandum of Association considering the changes required for Conversion of OPC into Private Company. 2. DRAFT ALTERED ARTICLES OF ASSOCIATION Make necessary alterations in Articles of Association: a. Addition of restrictions applicable to a private limited Company as per Section 2(68) b. Addition/Deletion of other points as may be required for private limited Company 3. NOTICE OF BOARD MEETING Draft and issue Notice Calling Board Meeting atleast 7 days before the Board Meeting [Sec 173 (3) of the Companies Act 2013] 4. CONVENE A BOARD MEETING Convene a Board Meeting for a. Considering the conversion of OPC into Private Company & Alteration of Memorandum and Articles of Association b. Increasing the number of Directors to Minimum Two (2) (in case of shortfall in minimum number of directors as required to be maintained by Company subsequent to its conversion into private Company) c. Increasing the number of Members to Minimum two (2) by allotment of shares or transfer of shares to the prospective members 5. CONDUCTING A BOARD MEETING FOR DISCUSSING CONVERSION · Where there is a Single Director Enter the resolution in Minutes Book of the Director’s Meeting, which should be signed and dated by the director and such date shall be the date of meeting for all purpose of Act [Section 122(4)] · Where there are 2 or more Directors Hold a Board Meeting for transacting the business for conversion 6. PASSING OF A RESOLUTION The resolution for alteration of its Memorandum and Articles of Association shall be communicated by the member to the company and entered in the minutes-book required to be maintained under section 118 and signed and dated by the member and such date shall be deemed to be the date of the meeting for all the purposes under this Act. [Rule 6(3) read with Section 122(3) of the Companies Act 2013] 7. COMMUNICATION FROM SHAREHOLDER Where the Board of Directors is different than a Shareholder of the Company, a Shareholder shall communicate about approval of conversion of OPC into Private Company 8. CONDUCTING A BOARD MEETING FOR APPOINTMENT OF ADDITIONAL DIRECTORS · Where there is a Single Director Enter the resolution in Minutes Book of the Director’s Meeting regarding appointment of additional directors on the Board. · Where there are 2 or more Directors Hold a Board Meeting for appointment of additional directors 9. FILING OF RESOLUTION Filing of resolution with the Registrar of Companies in E-Form MGT 14 within 30 days of passing the said resolution 10. FILING OF APPLICATION Filing of application in E-Form INC-6 with the Registrar of Companies for its conversion into Private Company within 30 days of passing special resolution. · Note: SRN of E-Form MGT 14 is mandatory field in E-Form INC-6 11. FILING OF APPOINTMENT OF DIRECTORS Filing of a resolution with the Registrar of Companies for appointment of additional directors within 30 days of appointment. 12. CERTIFICATE OF CONVERSION Upon being satisfied with the Application, the Registrar will issue Certificate of Conversion. 13 STEPS TO BE TAKEN POST CONVERSION a. Printing of Altered Memorandum and Articles of Association b. Arrange for New Pan Card of the Company c. Arrange for new printed stationary d. Arrange for new Name Board/Sign Board of the Company e. Arrange for new Common Seal, if any f. Update Company bank account details g. Intimation to all concerned Statutory Authorities. h. Make correction to the extent the same mentions the New Name of Company on all records, registers including the register of members, charges registered with ROC, share certificates etc. DOCUMENTS REQUIRED FOR APPLICATION OF CONVERSION: Altered copy of MOA & AOA Certified Copy of Board resolution authorizing giving of Notice Certified Copy of Special resolution List of proposed Members and its Directors along with consent List of Creditors and their NOC Latest Audited Balance Sheet and Profit & Loss A/c Copy of Minutes Certificate of Incorporation of OPC Identity and Residential Proof of Proposed Members and Directors Any other information can be provided as an optional attachment(s). NOTE: Conversion of OPC into Private Limited Company shall not affect any previous debts, liabilities, obligations or contracts entered into, by or on behalf of the OPC and such debts, liabilities, obligations and contracts may be enforced in the manner as if such conversion into Private Company had not been done. HOW CAN COMPLIANCE CALENDAR HELP? There are recent amendments in the procedure for Conversion of OPC into Private Company which requires requisite legal knowledge of Companies Act 2013. Conversion procedure involves proper steps to be followed and Application for Conversion is to be made in compliance with the provisions of Companies Act 2013 so as to enable Ministry of Corporate Affairs (MCA) to issue Certificate to the effect of Conversion upon being satisfied with the Application and documents required for conversion. Hence it is advisable to seek proper professional guidance from experienced professionals. Compliance Calendar LLP has a team of skilled Legal Professionals who can assist and guide you in complying with process of Conversion of OPC into Private Company in a timely manner.
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Start Your Business
Private Limited Registration
Public Company Registration
OPC Pvt Ltd Registration
LLP Firm Registration
Section 8 Company Registration
Nidhi Company Registration
Insurance Company Registration
NBFC Company Registration
Producer Company Registration
Foreign Subsidiary Registration
Foreign Branch Office
Foreign Liaison Office
Foreign Project Office
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Grow Your Business
GST Registration
MSME Registration(UDYAM)
Shop & Establishment Registration
Startup India Registration
ESI/PF Registration
IEC Code (Import Export)
Startup Consultation
Appoint Virtual CFO
Angel Funding/ VCs
Virtual Office Service
Due Diligence of Company
Business Development
Protect Your Business
Trademark Registration
Trademark Objection
Trademark Hearing
Trademark Opposition
Trademark Infringement
Trademark Renewal
Trademark Assignment
Trademark Withdrawal
Trademark Monitoring
Logo Design Service
Copyright Registration
Patent Registration
Exit Your Business
Close Company
Fast Track
Close LLP
Close Firm
GST Cancellation
Change Services
Change Company Name
Change LLP Name
Change Company Object
Change LLP Object
Increase Authorised Capital
Increase Paid-up Capital
Increase LLP Capital
Transfer of Shares
Alteration in MoA & AoA
Resignation of Auditor
Appointment of Director
Resignation of Director
Change in Designation of Director
Shifting Registered Office of Company
Shifting Registered Office of LLP
Dormant Status of Company
Mandatory Compliances
Appoinment of Auditor
Annual Filings of Company
Annual Filings of LLP
Annual DIN/DPIN KYC
Annual Return of Deposits
Half Yearly MSME Return
Statutory Registers & Minutes
XBRL Filing of Companies
eStamping of Share Certificates
Dematerialisation of Shares
RBI FEMA Compliance
GST Returns Filing
ESI-EPF Returns Filing
TDS Returns Filing
Change in Structure
Proprietorship to OPC
OPC to Private Limited
Private Limited to OPC
LLP to Private Limited
Private Limited to LLP
Partnership Firm to LLP
Private Limited to Public Company
Public Company to Private Limited
Trust/Society to Section 8 Company
Existing Company to Section 8
Existing Section 8 to Company
Services
Accounting & Book Keeping
GST Compliance
Valuation Services
Corporate Litigation
Company Law Advisory
Services For Banks
Drafting & Vetting Services
Startups Funding
Business Loans
Get in Touch
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NBFC Micro-Finance Registration
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NBFC Core Investment Company
NBFC ROC Compliance
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NBFC Consultancy
NBFC Compliance Calendar
NBFC Independent Director
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ISO 9001:2015
ISO 14001:2015
ISO 13485:2016
OHSAS 18001:2007
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CMMI Level 3 Certification
ISO 22000:2005
ISO 27001:2013
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FSSAI License Renewal
FSSAI Returns Filing
FSSAI Compliances
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ITR
Salaried Person
Firms/LLPs
Companies
NGOs
Income Tax Notice
Income Tax Planning
Income Tax Litigation
Charity
Section 8 Company
Trust Registration
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80G & 12A Registration
FCRA Registration
NITI Ayog Registration
CSR-1 Registration
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