Complete Procedure, Benefits & Cost
One person company have certain limitation and one limitation is capital investment in business because if business need additional capital, in that case need more person who can invest money in business so that business can head in next stage so in order to grow bigger and expand its business, One Person Company usually shifts to Private limited company.
We cover the article in following heading.
- Advantage of conversion from OPC to Pvt. Ltd. Company.
- Type of Conversion
- Procedure of conversion from OPC to Private Limited Company
- ADVANTAGE OF CONVERSION FROM OPC TO PVT. LTD. COMPANY.
- Easy Fund raising
- Taxation Benefit
- Business credibility improve
- Cross border expansion
2. TYPES OF CONVERSION
Following given below the types of conversion and condition applicable.
1. Mandatory Conversion:
Mandatory Conversion of OPC takes place when a One Person Company (OPC) has a paid-up share capital of more than or equal to Rs. 50 lakhs or the Annual turnover during the relevant period exceeds Rs. 2 crore, then in that cases, the company has to mandatory convert itself into Private Limited Company or Public Limited Company.
2. Voluntary Conversion:
Initial 2 year of after incorporation of OPC company, cannot covert into private limited company. If the time period gets elapsed, it can convert as per the Companies act 2013. It is much more advantageous to convert it into Private Limited Company voluntarily after two year because most of the companies which opt for One Person Company generally tend to exceed the threshold limit within these two years.
3. PROCEDURE OF CONVERSION FROM OPC TO PRIVATE LIMITED COMPANY
STEP I- Intimation of Conversion to Registrar of Companies
The first step of conversion involves intimation to the concerned ROC regarding conversion. The Registrar of Companies must first be informed through the prescribed procedure that the One Person Company is now transforming itself into a private limited company or a limited company.
STEP II- Passing of Resolutions
The next steps is to passing of resolutions by the members of the Company in a General Meeting to effect that:
- Conversion of OPC to Private Limited Company.
- Alteration of MOA and AOA of the Company.
- Appointment of additional directors of the Company.
- Approval for increase in capital of the Company, if required.
STEP III- Filing of form MGT-14
The third step towards the process of conversion is Filing of Form MGT-14 with Registrar of Companies within 30 days of passing the special resolution, along with certified copies of minutes and resolution passed.
STEP IV- Filing of Form INC-6
The next step requires to file Form INC-6 which has to be filled properly with all the details of particulars and thereafter it has to be submitted along with the fees and the documents that are required with the concerned ROC within 30 Days from Passing the resolution. Within fifteen days an application shall be filed to the Registrar along with the copy of the resolution regarding the conversion of the company into a Private company.
Documents and Attachments to be attached along with the form:
1. Notice to board of directors
2. Copy of board resolution authorizing giving of notice
3. Copy of Altered Memorandum of Association (MOA)
4. Copy of Altered Articles of Association (AOA)
5. Declaration from directors
6. List of Members
7. Copy of NOC from Secured Creditors if any
8. Copy of NOC from directors and shareholders
9. Last Audited Financial Statements
10. It is mandatory to attach a certificate from CA if the conversion is because of exceeding average annual turnover
Registrar of Companies (ROC) after filing all the required documents on being satisfied that Company has complied with prescribed requirements the Registrar will issue the Certificate certifying the conversion of One Person Company (OPC) to a Private Limited Company.