Conversion from Private Limited Company to One Person Company
Conversion from Private Limited Company to One Person Company
Procedure to Convert Private Company into One Person Company (OPC) Under Companies Act 2013
In this article you will find Regulatory requirements for Conversion of Private Company to One Person Company,Procedure or steps for Conversion of Private Company to One Person Company and Post Conversion requirements for Conversion of Private Company to One Person Company.Conversion of status of company from private to OPC would become effective from the date of receipt of the approval of the Registrar through the change of name would become effective on the issue of fresh Certificate of Incorporation.
Advantages of One Person Company Business form are:
- Legal status with completed control
- Limited Liability
- Taxation relaxion
- Less compliance and management
- Easy Banking Operations
The Companies Act, 2013 was expected to simplify the provisions but on the contrary it brought lot of restrictions on doing business. Therefore the private companies are converting themselves into One Person Company.
With less compliance to be followed, a One Person company can be easily managed , conversion of the Sole Proprietor firm or Partnership or Private Limited Company to OPC would benefit most people.
Legal Provisions related to Conversion of Private Company into OPC are given in Section 18 the Companies Act, 2013 read with Rule 7 of Companies (Incorporation) Rules, 2014.
Bare Act Language of Section 18 of the Companies Act, 2013 and Rule 7 of Companies (Incorporation) Rules, 2014 given at the end of Article.
A private company other than a company registered under Section 8 companies Act 2013, who having a share capital of 50 lakhs rupees or those having an average annual turnover is 2 crore rupees during the relevant period, may convert their private company into one person company.
Procedure/Steps For Conversion Of Private Company Into One Person Company
|A.||BOARD MEETING||ISSUE NOTICE in accordance with the provisions of section 173(3) of the Companies Act, 2013, for convening a meeting of the Board of Directors. Main agenda for this Board meeting would be:|
|AGENDA :To Get in-principal approval of Directors for Conversion of Private Company into One Person Company (OPC).Fix date, time and place for holding Extra-ordinary General meeting (EGM) to get approval of shareholders, by way of Special Resolution, for Conversion of Private Company into One Person Company (OPC).To approve notice of EGM along with Agenda and Explanatory Statement to be annexed to the notice of General Meeting as per section 102(1) of the Companies Act, 2013;To authorize the Director or Company Secretary to issue Notice of the Extra-ordinary General meeting (EGM) as approved by the board.|
|Important Note:||Before passing such special resolution, the company shall obtain No Objection Certificate in writing from existing members and creditors.|
|B.||NOTICE OF GENERAL MEETING:||Provisions of the Section 101 of the Companies Act 2013 provides for issue of notice of EGM in writing to below mentions at least 21 days before the actual date of the EGM :· All the Directors.· Members· Auditors of Company|
|C.||CONVENE A GENERAL MEETING:||· Check the Quorum.· Check whether auditor is present, if not. Then Leave of absence is Granted or Not. (As per Section- 146).· Pass Special Resolution.[Section-114(2)] to getshareholders’ approval for Conversion of Private Company into One Person Company (OPC).· Approval of Alteration in MOA.|
|D.||ROC FORM FILING||For conversion of private company in OPC under section 18, few E-forms will be filed with concerned Registrar of Companies at different stages as per the details given below|
|E- Form MGT.14||As per Section 117(3)Copy of this special resolution is required to be filed with concerned ROC through filing of form MGT.14 within 30 days of passing Special Resolution in the EGM|
|ATTACHMENT:i.Notice of EGM along with copy of explanatory statement under section 102;ii. Certified True copy of Special Resolution;iii. Altered memorandum of association;iv. Altered Articles of association;v. Certified True copy of Board Resolution may be attached as an optional attachment.|
|It is relevant to note that First you have to file form MGT.14 as SRN No. of form MGT.14 will be used in form INC.6|
|E- Form INC.6||Accordingly an Application for conversion of a Private company into a OPC is required to be filed in e-Form INC.6 to the ROC concerned, with all the necessary annexure and with prescribed fee.|
|ATTACHMENT:1. The list of members and list of creditors.2. The latest Audited Balance Sheet and the Profit and Loss Account; and3. The copy of No Objection letter of secured creditors.4. NOC of Members and Creditors.5. The directors of the company shall give a declaration by way of affidavit duly sworn in confirming that all members and creditors of the company have given their consent for conversion, the paid up share capital company is fifty lakhs rupees or less or average annual turnover is less than two crores rupees, as the case may beOther information if any can be provided as an optionalattachment|
|Duty of ROC:Concerned Registrar of Companies (ROC) will check the E-forms and attached documents filed by the Company for Conversion of Private Company into One Person Company (OPC). 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).|
Post Conversion Requirements For Conversion Of Private Company Into One Person Company
|Post Conversion Requirements|
|A.||Arrange new PAN No. of the company|
|B.||Arrange new stationary with new name of the Company|
|C.||Update company bank account details|
|D.||Intimate all the concerned authorities like Excise and sales tax etc about the status change|
|E.||Printed copy of new MOA & AOA.|
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