Procedure for conversion of One Person Company into a Private Limited Company.

Section 18 
Procedure for conversion of One Person Company into a Private Limited Company.

A) Conversion Require as per Law: Mandatory Conversion

(i) Where the paid up share capital of a One Person Company exceeds Rs. 50 lacs or 

(ii) its average annual turnover exceeds Rs. 2 crores during immediately preceding three consecutive financial years, within 6 month of the date as mention above.

Step 1

Convene the Board Meeting

(a) Pass Board resolution for increase in No. of Directors.    

                                  (Minimum 2 Directors)

(b) Pass a board resolution to get in principal approval of Directors for increase shareholder of the Company.                                                                    

 (Minimum 2 Share holders)

(c) Pass Resolution to get shareholders approval for Alteration in MOA & AOA of Company

Step 2

Alteration in Memorandum of Association

Alter the Memorandum of Association (MOA) of the Company by passing a resolution as per Sub-section (3) of Section 122 (Applicability of this Chapter to One Person Company) of Companies Act, 2013;

But as per Section 122(3) it shall be sufficient if, in case of OPC, the resolution is communicated by the member of the company and entered into the minutes books required to be maintained u/s 188 and signed and dated by member and such date shall be deemed to be the date of the meeting for all the purpose under this Act.

Step 3

Filing of Form to Registrar of Companies

As per Rule 6(4) The Companies (Incorporation) Rules, 2014 : 

File Form INC 5 (for Form click here) with the concerned Registrar within 60 days from the date of applicability of the above provisions.

Purpose of the Form: One Person Company- Intimation of exceeding threshold

Attachments:

(Ref: Form INC-5 helpKit)

• Certified true copy of board resolution where person giving notice has been authorized
• Copy of the duly attested latest financial statements
• Certificate from a Chartered Accountant in practice for calculation of average annual turnover during the relevant period – This certificate is mandatory to attach if the threshold limit is exceeded on account of average annual turnover
• Any other information can be provided as an optional attachment(s).

File  Form INC-6 (for Form click here) with the concerned Registrar within 6 Month from the date of exceeding of threshold Limits.

Purpose of the Form: One Person Company- Application for Conversion

Attachments: 

(Ref: Form INC-6 helpKit)

• It is mandatory to attach following with this eForm in all the three purposes
• Altered Memorandum of association
• Altered Articles of association
• Copy of the duly attested latest financial statement.
• Copy of board resolution authorizing giving of notice
• It is mandatory to attach a certificate from Chartered Accountant if the conversion is, because of exceeding average annual turnover

Penal Provisions:

If One Person Company or any officer of the One Person Company contravenes the provisions of these rules, One Person Company or any officer of the One Person Company shall be punishable with fine which may extend to ten thousand rupees and with a further fine which may extend to one thousand rupees for every day after the first during which such contravention continues.

B) Voluntary Conversion One Person Company into a Private Limited Company.

• When a One Person Company gets incorporated, it cannot convert itself to Private or Public company for a period of not less than two years from the date of incorporation.
• If the time period of two years is over, a One Person Company can apply for converting itself to Private Limited Company or Public limited company.
• The Conversion process should be as per the rules laid down by the Companies Act, 2013 under Section 18, and Rule 7(4) of the Companies (Incorporation) Rules, 2014.

Step 1

Convene the Board Meeting

(a) Pass Board resolution for increase in No. of Directors.    

                                  (Minimum 2 Directors)

(b) Pass a board resolution to get in principal approval of Directors for increase shareholder of the Company.                                                                    

               (Minimum 2 Share holders)

(c) Pass Resolution to get shareholders approval for Alteration in MOA & AOA of Company

Step 2

Alteration in Memorandum of Association

Alter the Memorandum of Association (MOA) of the Company by passing a resolution as per Sub-section (3) of Section 122 (Applicability of this Chapter to One Person Company) of Companies Act, 2013;

But as per Section 122(3) it shall be sufficient if, in case of OPC, the resolution is communicated by the member of the company and entered into the minutes books required to be maintained u/s 188 and signed and dated by member and such date shall be deemed to be the date of the meeting for all the purpose under this Act.

Step: 3

File  Form INC-6 (for Form click here) with the concerned Registrar within 30 Days from the Passing SR

Purpose of the Form: One Person Company- Application for Conversion

Attachments: 

(Ref: Form INC-6 helpKit)

• Certified true copy of board resolution where person giving notice has been authorized
• Altered copy of MOA & AOA.
• Copy of the duly attested latest financial statements
• Certified true copy of Special resolution where person giving notice has been authorized
• Any other information can be provided as an optional attachment(s).

ROC on being satisfied that Company has complied with prescribed requirements the Registrar shall issue the Certificate to the effect of Conversion of Private Company into One Person Company (OPC).

REQUIREMETNS AFTER THE CONVERSION

1. Arrange new PAN No. of the company
2. Arrange new stationary with new name of the Company
3. Intimate all the concerned authorities like Excise and sales tax etc about the status change
4. Print copy of new MOA & AOA.
5. Update company bank account details.

Thanks & Regards                       

Ravi Garg                                    Facebook Group               Linkedin

Company Secretary                 Google Group                   Blog

91-7838204665,