Conversion of Pvt Ltd to One Person Company

As per the Companies Act, 2013, which establishes a process to change one kind of company into another, a PLC (Private Limited Company) may be converted into an OPC (One Person Company). With effect from 1 April 2014, Section 18 of the Act expressly permits the conversion of an existing private limited company that has already been registered.

Transforming Pvt Ltd to OPC: The Companies Act, 2013 Conversion Process

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Conversion of Pvt Ltd to One Person Company

As per the Companies Act, 2013, which establishes a process to change one kind of company into another, a PLC (Private Limited Company) may be converted into an OPC (One Person Company). With effect from 1 April 2014, Section 18 of the Act expressly permits the conversion of an existing private limited company that has already been registered.

The duties and legal commitments of the business before conversion would not change as a result of the PLC becoming an OPC, and the new OPC would be responsible for them. Such claims, liabilities, and obligations would also be legally enforceable.

The organizational framework of a private firm frequently disintegrates when one of its promoters decides to leave his job. The expert in this case proposes that you convert your private limited business to an OPC. An OPC is a type of business structure that can be incorporated with just one stakeholder.

Benefits of converting Pvt Ltd to One Person Company

Here are the some benefit of converting Pvt Ltd to One Person Company :

  • No formality for the board meeting: A one-person business is not required to hold board or general meetings.
  • Greater Business from Ownership: Due to the risks involved in being a sole proprietor, one person companies might draw interested investors.
  • Is well-known in the market: One Person Companies draw qualified applicants to aid in the expansion of the business because they are comparable to Private Limited Companies.
  • A single director is necessary: The One Person Company can be formed with just one Director.
  • Ease in Managements: Management is simpler with a one-person company than with a private limited company.
  • Offers its Member Limited Liability: By limiting responsibility from personal assets, it protects its shareholders in contrast to a sole proprietorship.
  • Share Transferability in a Simple Way: Filling up the share transfer form and giving it to the buyer of the shares is all that is necessary to transfer shares in a One Person Company.

Eligibility Criteria for Converting Pvt Ltd to One Person Company

The following requirements must be met before you are permitted to Private Limited to a One Person Company.

  • The decision to convert should be approved by all of the directors.
  • To the extent that you can defend this conversion—which is, to be honest, a downgrade—your net worth should have been severely decreased.
  • In the event of your death or incapacitation, you must designate a nominee who will manage your one-person business.
  • Before proceeding with this conversion, you must receive the consent of your creditors.
  • The directors of your private limited company must certify in an affidavit that they are willing to resign from their positions in order for your firm to be changed to a one-person company.

Process of converting Pvt Ltd to Public Ltd

An overview of the conversion process into a public limited company in accordance with the relevant provisions of the Companies Act of 2013 and the Companies (Incorporation) Rules of 2014 is provided below for your understanding:-

  • Conducting a board meeting and discussing the items on the agenda: To accept, subject to the consent of the shareholders, the conversion of Pvt. Ltd. to Public Limited. Subject to the consent of the shareholders, to approve a new set of articles and the memorandum of association.
  • The announcement of the general meeting. Giving members at least 21 days' notice before the meeting A general meeting may be convened with less notice if written or electronic permission from 95% of the members or more is obtained. To cast a vote at such a meeting.

Documents required for converting Pvt Ltd to One Person Company

The following attachments must be filed with a copy of the Special Resolution at the Registrar of Companies:

  • Notice of Extra General Meeting (EGM), which was conducted to obtain Directors' consent for the Private Limited Company's conversion to a One Person Company.
  • Original copy of the Special Resolution
  • Modified Articles of Association
  • Articles of Association Modification
  • It is optional to submit a real certified copy of the Board Resolution.
  • E- Form INC 6
  • Application for a Private Limited Company to Change to a One Person Company with the Required Attachments:
  • List of all participants and debtors
  • Most recent balance sheet
  • No Objection' letter from the creditors and members
  • Affidavit-based letter of consent from the directors
  • Process for Converting Pvt Ltd to One Person Company
  • Call a Board of Directors EGM.

Document Required for Start Company

  • Original copy of the Special Resolution
  • Articles of Association Modification
  • List of all participants and debtors

Frequently Asked Questions

Corporate Affairs Ministry

You must meet the requirements outlined in the eligibility section of this page before being permitted to Private Limited to a One Person Company.

The number of shareholders that can register as an OPC, excluding employees and directors, is fifty. OPC Asset Solutions employs between 51 and 200 people in India.
 

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