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Procedure to convert OPC into Private Limited Company

Concept of One person company(OPC)

One Person Company is a unique concept introduced by the Ministry of Corporate Affairs in order to encourage the small traders and entrepreneurs. OPC registration is completely online process.One of the major advantages of an OPC is that there can be only one member in an OPC, where in case of Private Limited Company or a Limited Liability Partnership minimum two persons are required. A single shareholder holds 100 percent shareholding. One person can form a company without any additional shareholder, and if the member is willing to add shareholders, all he needs to do some procedural compliances to convert OPC in to a regular private limited company and file it before MCA. Procedure to convert OPC into Private Limited Company is laid down in Section 18 of the Companies Act, 2013 and Companies (Incorporation) Rules of 2014.

Concept of Private Limited Company

Private Limited Company Registration is the most preferred form of company registration by most of the entrepreneurs in lndia. Private Limited Registration is very simple and online process.Companies are those types of companies where minimum number of members is 2 and maximum number is 200 as per new Companies Act. 2013. A Private Limited Company has all the advantages of a Partnership firm. It has advantages of Limited Liability Partnership with greater stability and legal entity.

Types of conversion of OPC to Private Limited Company

Basically there are two types of conversion-

1. Voluntary Conversion

When OPC gets incorporated, it cannot convert itself into any other form of business for 2 years from the date of incorporation. After 2 years it can convert into Private Limited, which is a good option as in 2 years mostly OPC exceed the threshold limit within these two years.

Procedure to convert Opc into Private Limited Company under Voluntary Conversion

OPC can get converted into Private Limited Company only after elapse of 2 years from the date of Incorporation.

Documents 

1.Altered Memorandum of association

2. Altered Articles of association

3. Copy of the duly audited and certified latest financial statement.

4. Copy of board resolution authorizing giving of notice

Contents of Form INC-6

Following are some important information to be filed in Form INC-6

1. Corporate identity Number (CIN) of the company
2. Date of exceeding the threshold limit
3. Amount so exceeded the threshold limit
4. Relevant period (in case turnover selected)
5. Particulars of special resolution
6. Authorized capital and paid up capital of the company
7. Maximum number of members

2. Compulsory Conversion

Compulsory conversion means when OPC exceed the Threshold limit as follow-

1. Paid-up capital of more than or equal to 50 lakhs

Or

1. Annual turnover during the relevant period exceeds 2 crore then in such case it has to compulsorily get converted into Private Limited Company

Procedure to convert Opc into Private Limited Company under Compulsory Conversion

Documents
1. Certified true copy of board resolution where person
giving notice has been authorized.

2. Copy of the duly attested latest financial statements

3. Certificate from a Chartered Accountant in practice for

calculation of average annual turnover during the relevant period

Documents 

1. Altered Memorandum of association

2. Altered Articles of association

3.Copy of the duly audited and certified latest financial statement.

4.Copy of board resolution authorizing giving of notice

Contents of Form INC-5

Following are some important information to be filed in Form INC-5

1. Corporate identity Number (CIN) of the company
2. Amount so exceeded the threshold limit
3. Declaration

Conclusion

A person can first initiate business by incorporating OPC i.e One Person Company and later after elapse of 2 years it can convert it into Private limited Company. It yields lot of benefits by converting it into Private Company.