It may be necessary to convert a private limited company into a one person company (OPC) when a co-founder or promoter leaves. In this article, we describe how to convert a private limited company into an OPC.
Meeting of the Board of Directors
It is necessary to conduct a Board Meeting to get in-principle approval from the directors in order to begin the process of converting a private limited company into a non-public company. A special resolution must be passed by the shareholders of the private limited company to obtain the approval of the Extraordinary General Meeting (EGM).
Based on the Companies Act, 2013, the Board should attach a support notice of the Extraordinary General Meeting (EGM) to the notice of the General Meeting along with the Agenda and the Explanatory Statement. As permitted by the Board, a Director or Company Secretary should also issue a notice of the Extraordinary General Meeting (EGM). All members, directors, and auditors of the company should receive a notice of the Extraordinary General Meeting (EGM).
Meeting of the Extraordinary General Meeting
A special resolution to convert the private limited company into an OPC must be passed at the Extra-ordinary General Meeting (EGM) on the due date.
In order to convert the private limited company into a One Person Company (OPC), the company must file the special resolution passed by shareholders with the Registrar of Companies associated with the company. As a result, you must file form MGT-14 with the appropriate Registrar of Companies within 30 days of passing the special resolution, along with the following attachments:
For the conversion to One Person Company, form INC-6 must be filed with the following documents:
- An affidavit duly sworn by the directors confirming that all members and creditors of the company have approved the conversion.
- An annual turnover of less than two crore rupees and/or an initial paid up share capital of less than fifty lakh rupees.
- Members’ list
- Creditors’ list
- Profit and Loss Account and the latest audited balance sheet
- Secured creditors’ letter of no objection.
Incorporating as a limited company instead of a partnership
In order to convert a private limited company into a one-person company (OPC), the Registrar of Companies (ROC) will verify the E-forms and attached documents filed by the company upon submission of the forms with the relevant documents. Upon being satisfied that the company has met the approved requirements, the Registrar will issue a certificate indicating the conversion to a one-person company.