Converting OPC to a Private Limited Company

One Person Companies one of the most popular business structures today, empowering a solo entrepreneur to start his journey. Introduced with the Companies Act 2013, One Person Company first time brought the concept of a Private Limited Structure which required only one member to start. A One Person Company is populated with features like Corporate Existence, Limited Liability but is crippled by a few restrictions which restrict future expansion such as a cap on members, authorized share capital and turnover. This might be one of the reasons you might want to go for a Private Limited company rather than a One Person Company or Convert your One Person Company to a Private Limited Company.

Can I convert my newly incorporated OPC to a Private Limited Company?
No, a One Person Company cannot be converted into a Private Limited Company within two years of its incorporation.

Can an OPC voluntarily convert itself to a Private Limited Company?
Yes, a One Person company can voluntarily apply for conversion to a private Limited Company.

What is Compulsory Conversion?
If the average turnover of any three consecutive financial years exceeds Two Crores or if the capital contribution exceeds fifty Lakhs, the OPC is mandatorily required to convert itself to a Private Limited company.

Converting OPC to a Private Limited Company, Conveting OPC to Private Limited Company

Procedure for Conversion:

  1. Convene a Board Meeting
  2. Pass a Board Resolution to increase the number of directors to the minimum for a Private Limited Company. (Minimum 2)
  3. Pass a Board Resolution to increase the number of members to the minimum required for a private limited company. (Minimum 2)
  4. Convene a Shareholders Meeting
  5. Pass a Resolution for alteration of Articles of Association and Memorandum of Association of the company
  6. File Necessary eForms for conversion of OPC to a Private Limited Company
  7. The Concern ROC on satisfaction will issue a new Certificate Of incorporation with Private Limited as the companies suffix.

Note: Conversion Procedure is pretty much same for both voluntary and mandatory conversion with different filing requirements.

How long should it take?
A typical conversion of an OPC to Private Limited could take around 7-15 Days depending on the circumstances.

What will happen to all the assets and liabilities of the OPC?
All the assets and liabilities of the OPC will stand transferred to the converted Private Limited Company.

What about my GST Number and PAN ?
You will require to get new GST Number and PAN for the Private Limited Company.