Private Ltd. to OPC Conversion

The Companies Act 2013 provides a mechanism to convert one category of company into another company. Section 18 of the Act specifically allows a private limited company that has already been registered to be converted as of April 1, 2014.

If a Private Company changes into an OPC, it won’t change its contractual or legal obligations or the company’s duties that it had before the change. These claims, liabilities, and duties will still be legal and the OPC will be responsible for them.

What conditions must be met in order for a Private Limited Company to become a One Person Company?

To convert a private limited company into a one-person company, you must adhere to the following requirements:

• The company’s balance sheet and books of accounts must be kept up to date.
• All ROC (Registrar of Companies) returns have been posted and submitted by the firm.
• To verify that the share certificates match the stamp duty payment and that the corporation has paid the necessary stamp duty on the certificates.
• All Tax Deducted at Source (TDS) has been deducted by the business, and pertinent TDS reports have been submitted.
• Before beginning the conversion, the business paid the applicable VAT and Service Tax, or GST, and submitted the required documentation.
• To verify that the business keeps up-to-date registrations at its registered office and records meeting minutes for its board and shareholders.
• The company operates in accordance with the relevant state regulations, and the firm is registered under the shop, controlling offices, shops, warehouses, etc.
• The company complies with professional tax rules in the states where its registered office is situated and where its workers are employed, if applicable.
• If the firm employs more than 20 people, it is registered with PF (Personal Insurance Corporation) and more than 10 people with ESIC (Employees State Insurance Corporation). It also lists monthly returns and pays its obligations under both PF and ESIC.

Take a look at the following requirements to determine whether a private limited corporation can be transformed into a one-person operation:

• The company’s capital is less than Rs. 50 lakhs.
• Throughout the previous three consecutive financial years, the company’s yearly turnover should have been less than Rs. 2 crores. Furthermore, the turnover will be considered from the date of formation if the firm is new and has not yet completed three years of operation.
• OPC’s shareholder needs to be an individual of Indian nationality.
• An OPC stakeholder is a person who spends 180 days of the year in India.
• Neither the shareholder of the resultant OPC nor any of its candidates may have incorporated any other OPC.
• A minor is not permitted to join or be a part of an OPC.

Required Documents

1.For Form MGT -14

Following is a detailed list of documents that are required to convert a private limited company into a public limited company, concentrating on the attachments that are required for Form MGT-14 and Form INC-6:

• A notice of the Extraordinary General meeting for the special resolution for conversion with explanatory statements that shows reasons and implications of the conversion.
• True certified copy passed by the shareholders during the EGM.
• The company’s Memorandum of Agreement and Articles of Association, which create the rules and bylaws.
• Copy of the resolution passed by the board of directors of the company.

2.For Form INC – 6

• A total list of the number of the company’s creditors and members
• The latest balance sheet of the company showing its assets, liabilities, and equity.
• A copy of the NOC letter from all protected creditors of the company.
• A copy of the NOC’s from all the creditors as well as members of the company.
• The company’s board of directors’ sworn declaration that all members and creditors approved the conversion.

How Can a Private Company Apply to Become an OPC?

Following is the process for the application –