Track Order
Public Company Registration

CONVERSION OF ONE PERSON COMPANY TO PRIVATE LIMITED COMPANY-PUBLIC LIMITED COMPANY

INTRODUCTION

With the Introduction of One Person Company (OPC) in India,Government clears its view that now they are focusing on promoting theIndividual business i.e. Proprietorship but with the new flavor of OPC.  It’s very easy to incorporate an One PersonCompany (OPC) Company, but here we are discussing about the Conversion of OnePerson Company (OPC).

Now, the question arises in the mind that why we need toconvert the One Person Company (OPC) in any other form of business. Here the answeris, if One Person Company exceeds the limit of either Turnover or Paid-up sharecapital, then the OPC has to convert itself into either Private Limited Companyor Public Limited Company.

Now, the question is, if neither the turnover exceeds thelimit nor Paid-up reaches to that extent, even thepromoter/shareholder/directors wants to convert it into either Private LimitedCompany or Public Limited Company. Can they do so? And the answer is yes, theycan do so, but after following the proper procedure which is being defined inCompanies Act, 2013.

Now, we have two options to convert an OPC into PrivateLimited/Public Limited:-

(i)                VoluntaryConversion

(ii)              MandatoryConversion

 

 

VOLUNTARY CONVERSION

Voluntary conversion of a One Person Company can be doneafter fulfilling the following conditions:

Two years should have been expired from the date ofincorporation irrespective of its Turnover or Paid-up Capital.

In simple sense, just after passing the two years of itsincorporation, any OPC can go for its conversion whether into PrivateLimited Company or into Public Limited Company. [Should be according to section18 of Companies Act, 2013 and rule 7(4) of the Companies (Incorporation) Rules,2014]

PROCESS OF CONVERSION

BOARD MEETING:

Hold a Board Meeting stating the following agendas, ifnumber of Directors is more then 1:

(i)                 The Company voluntarily wants to convert itselfinto Private Limited Company.

(ii)               Approval of Notice of Extra-Ordinary Meeting whichwill be held for Alteration of Memorandum of Association and Articles ofAssociation of the Company in accordance with the provision of the CompaniesAct, 2013.    

 

EXTRA-ORDINARY GENERAL MEETING/ANNUAL GENERAL MEETING

 

After Convening the Board Meeting, now there is a need to approvethe Agenda of Conversion in Extra-Ordinary General Meeting Annual General Meeting.

Here the procedural work is over, now there is a need tofile the required Forms as demanded by the Law to be filed with the Registrarof Companies (ROC).

 

 

FORMS TO BE FILED

 

Form No. MGT-14 - There is a requirement to file formMGT-14 within 30 days from passing of special resolution in Extra-OrdinaryGeneral Meeting/Annual General Meeting with the required attachments includingTrue certified copies of the minutes and resolution.

 

Form No. INC-6 – Pursuant to Section-18 of Companies Act,2013 and Rule 7(4) of theCompanies (Incorporation) Rules, 2014, the Company shall file Form No. INC-6within 30 days of passing special resolution. But, before filing of Form No.INC-6, it should be ensured by the Company that the Filed MGT-14 should havealready been approved by the ROC.

 

Aftersuccessful submission of the Form No. INC-6, the ROC shall issue a NewCertificate of Incorporation, if he satisfies with all attachments andrequired.

 

 

MANDATORY CONVERSION

 

The condition of Mandatory Conversion arises where the paidup share capital of an One Person Company exceeds fifty lakh rupees or itsaverage annual turnover during the relevant period exceeds two crores rupees,it shall cease to be entitled to continue as a One Person Company.

 

 PROCESS OF CONVERSION

 

BOARD MEETING:

Convene a Board Meeting stating the following agenda:

(i)                 Approval of Notice of EGM/AGM Resolution forAlteration of MOA and AOA.

(ii)               For giving a Notice to ROC of Applicability ofMandatory Clause for Alteration.


EXTRA-ORDINARY GENERAL MEETING/ANNUAL GENERAL MEETING

After Convening the Board Meeting, now there is a need toapprove the Agenda of Conversion in Extra-Ordinary General Meeting Annual GeneralMeeting.

Here the procedural work is over,now there is a need to file the required Forms as demanded by the Law to befiled with the ROC.


FORMS TO BE FILED

Form No. INC-5 (NOTICE TOREGISTRAR)- An OPC is required to file a Notice within 60 days from  the date of enhancement of above ceilinglimit, in Form No. INC-5 informing that it has ceased to be a One PersonCompany and that it is now required to convert itself into a private company ora public company by virtue of its paid up share capital or average annualturnover, having exceeded the threshold limit.

It may be noted that"relevant period" means the period of immediately preceding threeconsecutive financial years.

Form No. INC-6 - Pursuant to Section-18 of Companies Act,2013 and Rule 7(4) of theCompanies (Incorporation) Rules, 2014, the Company shall file Form No. INC-6within 6 months from the effective date on which the above threshold limit wasexceeded. But, before filing of Form No. INC-6, it should be ensured by theCompany that the Filed INC-5 should has already been approved by the ROC.

 

After successful submission of the Form No.INC-6, the ROC shall issue a New Certificate of Incorporation, if he satisfieswith all attachments and required.