The Conditions for Converting a Private Limited Company into an Open-Ended Corporation
- New OPC members should be natural persons
- New members of the OPC must be Indian citizens or have spent 120 days in India in the previous financial year
- Members of OPCs should not be members of other OPCs or nominees for other OPCs
- OPC does not allow minors to join or participate
- Section 8 companies should not be converted into OPCs.
Private Companies can Convert into OPCs by the following the Procedure
Private companies are converted into OPCs by following these steps:
- Meeting of the board is called
- Meeting of the board
- An EGM is called for
- Creditors’ NOC
- EGM to be held
- Filing of forms with the RoC
- Certificates of ownership issued
1. Board meeting call
All board members should receive a notice of the board meeting at least seven days before the meeting. The notice should also include the agenda for the meeting.
2. Meeting of the Board
Board meetings are important for several reasons:
- For a Private Limited Company to become an OPC, its board of directors must approve the conversion
- Date, location, time, and day of the extraordinary general meeting will be determined
- The agenda, notice, and explanation of the EGM are for approval
- EGM notices may be issued by any director.
3.Call for EGM
A notice of the extraordinary general meeting (EGM) must be sent to all members, directors, and auditors at least 21 days before the meeting.
4. Creditors’ NOC
A no-objection certificate (NOC) should be obtained from the existing shareholders and creditors before the special resolution is passed at the EGM.
5. Hold EGM
There are several reasons for holding the EGM:
- Attend the meeting with a quorum.
- According to Section 146 of the Companies Act, 2013 if the auditor is not present, check whether the auditor has been granted a leave of absence.
6. Form Filing to RoC
In order for conversion of private limited company to OPC, certain e-Forms must be submitted to the appropriate registrar of companies (RoC).
Form MGT-14
As soon as the EGM passes the special resolution, Form MGT-14 should be submitted to the RoC. Within 30 days of the special resolution’s passage, Form MGT-14 should be submitted to the RoC.
- Explanatory statement and notice of EGM
- The special resolution in its true and certified form
- There are two types of company documents: the articles of association (AoA) and the memorandum of association (MoA).
- The board resolution in its true and certified form.
Form INC-6
Form INC-6 must be filed with the RoC. With this application, along with the relevant attachments, you should request that a private company be converted into an OPC.
- Creditors and members listed in alphabetical order
- Balance sheet for the company as of the most recent quarter
- No objection letter
- An affidavit of the company’s directors declaring that all creditors and shareholders consent to the conversion, that the company has less than 50 lakh in paid-up capital, and that its turnover is within two crores.
7. Certificate of Issue for Shares
Registrars of companies will review all e-Forms and attached documents submitted by the private company before converting it into an OPC. If a private company is converted into an OPC, the RoC should issue a share certificate once the registrar of companies has determined that the private company has met all statutory requirements.
FAQ
1. Can a private limited company be converted into OPC?
For a private company to become a One Person Company (OPC), certain e-forms must be filed with the Registrar of Companies (ROC), including Form MGT-14. Form MGT-14 must be filed within 30 days after passing the special resolution to convert a private limited company into an OPC.
2. When should the OPC be converted into public or private company?
If the paid-up share capital of a One Person Company (OPC) exceeds Rs. 50 lakhs, the company is required to convert itself to a private or public entity. Two consecutive financial years have seen a turnover of more than two crore rupees.
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