A One Person Company (OPC) is a company with only one person as member. An OPC may convert into a private company/ public company voluntarily. Before the inception of Companies (Incorporation) 2nd Amendment Rules 2021, it was mandatory for an OPC to convert to a private/ public company, if it’s paid-up share capital exceeded Rs. 50 lakhs or the aggregate annual turnover of the relevant period exceeded Rs. 2 crores. After the amendment, with effect from 1st April 2021, no more mandatory conversion applies. The restriction for voluntary conversion that at least two years should expire from incorporation of OPC has also been removed with effect from 1st April 2021.
Conversion of OPC shall not affect any debts, liabilities, obligations or contracts incurred or entered, by or on behalf of the company before conversion and such debts, liabilities, obligations and contracts may be enforced in the manner as if such registration had not been done.
|Content||Public Company||Private Company|
|Number of Members (Minimum)||Seven||Two|
|Number of Directors (Minimum)||Three||Two|
Steps to be performed for conversion:
- Issue Notice for convening a meeting of the Board of Directors.
- Pass resolution for conversion OPC into Private/ Public Company.
- Pass resolution for increase in Number of Directors (if needed)
- Pass resolution for increase in number of shareholders of the Company
- Pass resolution to get shareholder’s approval for Alteration in MOA & AOA of Company.
- Instead of shareholder’s meeting, the member shall communicate the following special resolutions to the company and entered the minutes-book required to be maintained under section 118 and signed and dated by the member.
- Conversion of OPC to Private/ Public Company
- Alteration of MOA and AOA
- Increase in number of directors and members
- File Form MGT-14 before filing of Form INC-6 since SRN details of the same must be entered in INC-6.
- File E-Form INC-6 within 30 days of passing special resolution.
Attachments to INC-6
- Altered MoA and AoA
- Copy of Resolution
- List of proposed members and its directors along with consent
- List of creditors
- Latest Audited Balance sheet and Profit and Loss Account
- On being satisfied that it has complied with the requirements stated, the Registrar shall approve the form. (The Registrar shall ensure that the provisions of Companies Act applicable for registration is followed, close the former registration of the company and after registering the documents issue a fresh certificate of incorporation as its first registration.)
Co-authored by Gopika Ashok & CA. Antony Mathias Chirayath