The structure of a private company tends to crumble when a promoter chooses to quit their position. In this case, the experts suggest converting the private limited company to an OPC. The process of converting a private limited company to an OPC is simple. Read on to know-how.
What Is a Private Limited Company (PLC)?
How Easy Is It To Convert A Pvt Ltd to OPC, A private limited company (PLC) is a privately owned company for small businesses.
A member’s liability in a private limited company is limited to the number of shares that he or she owns. Shares in a private limited company cannot be exchanged publicly. People with high objectives and goals are more likely to pick a private company as their business structure.
A private company can have a minimum of 2 members and a maximum of 200 members, according to the Companies Act of 2013. Furthermore, to oversee corporate activities, a minimum of 2 and a maximum of 15 directors are required. In addition, a foreign national/ NRI can serve as a director of a private limited company. Let’s see how to convert PVT LTD To OPC.
What Is a One Person Company?
In the Indian corporate sector, the concept of an OPC, or one-person company, is relatively new. For the incorporation of this structure, only one person is required. A person, on the other hand, is not permitted to use more than one OPC.
A sole proprietorship is not the same as a one-person company. A proprietorship firm is not a separate legal entity, which is a significant distinction between the two. An OPC, on the other hand, is a separate legal entity.
In addition, a nominee may not be nominated for more than one company.
Benefits of Conversion of Private Limited Company to OPC
The following are the advantages of Convert A PVT LTD To OPC:
Filing Annual Returns with Ease
In comparison to any other business structure, an OPC requires far less yearly and ROC compliance. The director does not need to get clearance from the company secretary before filing the annual returns.
Ease of Decision-Making
Operating an OPC is simple because it requires more rapid decision-making than any other business structure. To register a company which is OPC we need to follow crucial steps!
No AGM Required
The laws governing an OPC are less strict than those governing a private corporation. As a result, a one-person company is not required to hold an annual general meeting.
Procedure for Conversion of Private Limited Company to One Person Company
Step 1: Convene Board Meeting
The board of directors must provide a notice of the meeting at least 7 days in advance. The agenda for the meeting must be included in the notice.
Step 2: Hold Board Meeting
A board resolution must be passed by the directors to approve the conversion of a private limited company to an OPC. They must also make the following business decisions:
- Fix the date, day, place, time of the EGM
- For the approval of the notice of EGM
- For the approval of the explanatory statement and agenda of the EGM
- To authorise directors to issue a notice for the extraordinary general meeting.
Step 3: Convene EGM
A notification for the EGM must be sent to all members, auditors, and directors of the company. They must send it at least 21 days prior to the EGM date.
Step 4: NOC from Creditors
The company must get a formal no-objection certificate from the company’s creditors and shareholders.
Step 5: Hold EGM
A special resolution must be passed by the shareholders to approve the conversion of a private limited company to an OPC. You can make opc registration online anytime The first step to a grand vision. Register today!
Step 6: File Form MGT-14
Within 30 days of the resolution’s approval, the company’s directors must file MGT-14 with the ROC. The form comes with the following attachments:
- Notice of EGM together with a copy of an explanatory statement
- Certified copy of a special resolution
- Altered memorandum of association
- Altered article of association
- Certified copy of board resolution.
Step 7: File Form INC-6
Now, submit INC-6 as an application for a private limited company conversion to an OPC. The form comes with the following attachments:
- List of members
- List of creditors
- Latest audited balance sheet
- Updated profit and loss statement
- NOC from the creditors
- NOC from the shareholders
- Declaration from the directors stating the following:
- Consent has been obtained from all the creditors has been obtained
- The paid-up share capital of the company is ₹50 lakhs
- Annual turnover is less than ₹02 crores.
Step 8: Issuance of Certificate
The ROC will provide a certificate for the Conversion of Private Company into OPC after examining the papers.
Post Conversion Requirements
The Post-conversion Requirements Are as Follows
- Arrange a new PAN (permanent account number) of the company
- Arrange stationery and letterhead with the new name of the company
- Update the company’s bank account details
- Inform all the authorities about the conversion
- A printed copy of the new MOA and AOA.
