Convert a Private Limited Company to an OPC
One Person Company (OPC) can be formed with only 1 owner, who acts as both the director as well as a shareholder of the company. There can be more than 1 director, but not more than 1 shareholder. For converting a Private Limited Company to an OPC, your paid-up capital and annual turnover should be less than ₹ 50 lakh and ₹ 2 Crore respectively.
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Convert PLC to OPC
The conversion of PLC (Private limited company) into an OPC (One Person Company) is provided as per the Companies Act, 2013, which implements a mechanism to convert one class of company into another. Section 18 of the Act, explicitly grants the conversion of an already registered private limited company starting from 1 April 2014. The conversion of PLC to OPC would not affect the responsibilities and contractual obligations of the company before conversion, and such claims, liabilities, obligations shall be enforceable by law, and the resulting OPC shall be liable for them.
Benefits of conversion from PLC to OPC
Limits Director's Liability
- Notice to the Board of Directors
- Copy of board resolution approving delivery of the notice.
- Copy of Altered Memorandum of Association.
- Copy of Altered Articles of Association.
- Declaration from Directors.
- List of members.
- Copy of NOC from secured creditors.
- Copy of NOC from shareholders.
- Audited Financial statements.
How to apply for conversion?
The application of the conversion of private limited company into a one-person company is filed using Form-INC-6 with the following statements.
- A declaration of the form with an affidavit by all the directors that all members and creditors of the company have given consent to the conversion of company into an OPC, and that the paid-up capital of the company is less than Rs. 50 lakhs and that the turnover is less than Rs. 2 crores.
- Affidavits from the members confirming the paid-up capital is less than Rs. 50 lakhs and the average turnover is less than two crores in the past three consecutive financial years.
- A certificate from a practising Chartered Accountant to confirm that the paid-up capital of the company is less than Rs. 50 lakhs and the turnover is less than two crores.
- The latest audited profit and loss account and balance sheet of the company.
- No Objection Certificate from all creditors.
- List of members and directors of the company.
- Copy of the board resolution and the specific resolution taken at the EGM, along with its notices, agenda, and informative statement.
- A modified copy of MOA and AOA, including related clauses, required for OPC.
FAQs on Convert a Private Limited Company to an OPC
- A one person company is managed by an individual whereas, PLC is managed in a group.
- In a PLC there is no provision to appoint a nominee to a member of the company. In OPC, since there is only one person, in his/her absence the nominee will take the place of the member
- The number of directors in OPC is one. Whereas, there are 2 directors in a private company.
Like any other company, an OPC can also spend in another company. An OPC is a sub-category of the private limited company and under its status, it can have a stake in another company, and own the same.
Yes. A one person company means that there will be only one shareholder for the company ownership, and in no way impact the ability to hire employees. An OPC can even have multiple directors.