Conversion of an OPC into a private limited company
A one person company converts into a private limited company under the Companies (Incorporation) Rules, 2014, by altering its constitution and filing Form INC-6. Company Suggestion prepares that filing.
How does an OPC become a private limited company?
The company stays the same legal person. The memorandum and articles are altered so that it is no longer a one person company.
From 1 April 2021, conversion is voluntary. Paid-up capital above ₹50 lakh, or turnover above ₹2 crore, does not by itself force the conversion. Those thresholds were removed from the Incorporation Rules.
The company must have at least two shareholders and two directors before it can be a private limited company. An OPC cannot convert into a section 8 company.
Who should convert an OPC?
Two plans fit this conversion:
- A member who is adding a co-founder as a shareholder.
- A company that will issue shares to an investor.
A member who will stay the only owner can remain a one person company.
Which documents does INC-6 need?
INC-6 is filed with five attachments.
- The altered memorandum and articles
- A copy of the special resolution
- The list of members and directors after the change
- The list of creditors
- A written no-objection from the creditors
What are the conversion steps?
Company Suggestion files the conversion in four steps.
- A second shareholder and, where needed, a second director are appointed.
- The member passes a special resolution to alter the memorandum and the articles.
- MGT-14 files that resolution within 30 days.
- INC-6 is filed. The Registrar issues a fresh certificate of incorporation as a private company.
Frequently asked questions
4 questions cover the rules that decide this registration.
Must an OPC convert after paid-up capital crosses ₹50 lakh?
No. From 1 April 2021 the Incorporation Rules no longer force an OPC to convert when capital crosses ₹50 lakh or turnover crosses ₹2 crore. Conversion is voluntary.
Which form converts an OPC?
Form INC-6. The special resolution is filed in MGT-14 within 30 days of the meeting.
How many members does the company need after conversion?
At least two shareholders and two directors. The original member can be one of each.
Does the company keep its identity?
Yes. It is the same company. The Registrar issues a fresh certificate of incorporation as a private limited company.