Conversion of Private Company into OPC

What is Conversion of Private Company into One Person Company (OPC)?

A One Person Company (OPC) has a single owner, which is a new initiative by the Indian government under the Company Act  2013. One Person Company (OPC) can have just a member but can hire up to 15 directors for the business. Conversely, a Private Limited company is run privately by a small group of people. It must have at least two directors, with a maximum of 15 directors and 200 members, as per the Companies Act 2013. The Companies Act 2013 allows everyone to transform one type of company into another. Converting a private limited company into a One Person Company (OPC) came under Section 18 of the Act and Rule 7 of the Companies (Incorporation) Rules, 2014. One-person companies have less compliance as compared to private limited companies. That's why it is the main reason for many private limited companies converting private into OPC companies.

What are the Conditions for Conversion of Private Company into One Person Company (OPC)?

• The new One Person Company (OPC) member must be a natural person.
• The member should be an Indian citizen who has stayed in India for at least 120 days in the preceding financial year.
• The member cannot be part of any other One Person Company (OPC) or act as a nominee in another One Person Company (OPC).
• Minors are not eligible to be members or part of an One Person Company (OPC).
• The company aiming for conversion should not be established as a Section 8 company.

What are the Benefits of Conversion of Private Company into One Person Company (OPC)?

These are the benefits for conversion of Private Limited company into One Person Company (OPC) :

• Simplified Decision-Making: It becomes easy and quick to make any decision with a single decision-maker.  In this, you don’t need a long decision with a group. When things don't work accurately you can take quick actions to run the business smoothly as everyone gets clear messages from just one person.
• Less Paperwork for Compliance: OPCs have fewer rules to follow compared to other types of companies. It means less paperwork is used for yearly reports and following compliance. It provides more time to achieve the business goal quickly. 
• Easy paperwork Sharing : OPCs are owned by one person and have simple paperwork for shares. In regular companies, handling shares involves lots of papers for giving, moving, and keeping track of who owns them. 
• Fewer Mandatory Meetings: The One Person Company (OPC) does not need to hold many meetings like other types of companies. It not only saves your time  but also reduces the owner's effort.
• More Focus on Business: The company owner can better concentrate on running his business with fewer rules and regulations. This flexibility enhances productivity and efficiency and allows the owner to focus on the company's growth without getting tied to extra rules and meetings.

What is the Procedure for Conversion of Private Company into One Person Company (OPC)?

Step-1 Hold Board Meeting:

• Directors decide to schedule the EGM meeting with a date and agenda.
• Notice for the meeting must be sent at least seven days before and should include the special resolution for conversion.
• This meeting typically includes a date, time, and location of the EGM. The director of the company will discuss and release the approved EGM notice.

Step-2 Call for Extraordinary General Meeting (EGM):

• Inform all the directors, members, and auditors at least 21 days before the Extraordinary General Meeting (EGM) date.

Step-3 Obtain NOC from Creditors:

• Obtain written No Objection Certificates from existing creditors and shareholders.

Step-4 Conduct Extraordinary General Meeting (EGM):

• Confirm meeting quorum and auditor’s presence or leave of absence.
• Pass a special resolution to approve the conversion and alter the MOA and AOA.

Step-5 File Forms with ROC:

• Submit Form MGT-14 within 30 days of passing the special resolution.
• File Form INC-6 with the Registrar of Companies (ROC) and required documents for company conversion.

Step-6 Issue of Certificate:

• The Registrar of Certificate (ROC) verifies the submitted forms and documents. Upon compliance, issue a conversion certificate. 

What is Documents Required for Conversion of Private Company into One Person Company (OPC)?

These documents are mandatory for converting a Private Limited company into One Person Company (OPC):-

For Form MGT-14:

• EGM notice with explanatory statement
• Special resolution copy
• Altered MOA and AOA
• Board resolution copy

For Form INC-6:

• List of creditors and members
• Latest balance sheet
• NOC from secured creditors
• NOC from creditors and members
• Affidavit confirming consent of creditors and members

Post-Conversion Requirements by the One Person Company (OPC):

• Obtain a new PAN card.
• Update stationery with the new name of  One Person Company (OPC).
• Update details of the company bank account 
• Notify relevant authorities about status changes.
• Print altered MOA and AOA.

What is the Fees to Convert a Private Company Into One Person Company (OPC)?

Are you looking for Conversion of Private Company Into One Person Company (OPC) Fees then here the details for you. The Conversion of Private Company Into One Person Company (OPC) cost start from ₹15000 to ₹50000 along with Government Fee ₹ Nil and Professional Fee ₹ Nil.

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