Conditions for Converting from a Private Limited Company to an OPC
- New OPC members should be natural persons
- Members of the new OPC must be Indian citizens or have spent 120 days in India in the previous fiscal year
- Member of OPC cannot be a nominee for another OPC or member of another OPC
- In order to become a member of the OPC, a minor must be 18 years of age or older
- It is not advisable to set up the company that will become an OPC as a Section 8 company.
Procedures for Converting Private Companies into OPCs
Private companies can be converted into OPCs by following the steps below:
- Set a meeting date for the board
- Meeting of the board
- The EGM has been called
- The creditor’s NOC
- EGM to be held
- Submission of forms to the RoC
- Certificates for shares are issued
1. Call for Board Meeting
There should be at least seven days notice sent to all members of the board prior to the meeting date, and in the notice, there should be a description of what will be discussed at the meeting.
2. Hold Board Meeting
There are a number of reasons why the board of directors should meet:
- Converting a Private Limited Company into an OPC requires approval by the board of directors
- We will determine the date, time, and place of the extraordinary general meeting
- Notice, agenda, and explanation of the EGM are for approval
- EGM notices can be issued by any of the directors.
3. Call for EGM
An extraordinary general meeting (EGM) notice must be sent to all members, directors, and auditors of the company at least 21 days before the meeting.
4. NOC from Creditors
An existing shareholder and creditor’s no-objection certificate (NOC) is required before passing the special resolution in the EGM.
5. Hold EGM
There are several reasons for holding the EGM:
- Ensure the meeting has a quorum.
- According to Section 146 of the Companies Act, 2013, you should check to see if the auditor is present. If not, find out if a leave of absence has been granted.
6. Form Filing to RoC
For a private company to become an OPC, it is necessary to file certain e-Forms with the registrar of companies (RoC). To submit these forms, please follow these steps:
In order to implement the special resolution approved at the EGM, Form MGT-14 should be filed with RoC within 30 days of the passing of the special resolution. To increase the disclosure, the following attachments should also be added to the Form MGT-14:
- An explanatory statement and the notice of the EGM are attached
- The special resolution in its true and certified form
- Governing documents of the company are the Memorandum of Association and the Articles of Association
- The board resolution in its original form.
Form INC-6 must be submitted along with the relevant attachments to the RoC to request the conversion of private company into OPC:
- Members and creditors are listed in full
- Last year’s balance sheet for the company
- An original letter of no objection
- This affidavit lays out the facts declaring that all creditors and shareholders consent to a private company being converted into an OPC, that its paid-up capital is less than £50,000, and that its revenue is less than £250,000.
7. Certificates of ownership issued
All e-Forms submitted and all documents attached by the private company must be reviewed by the registrar of companies before converting it into an OPC. In the case of converting a private company into an OPC, the RoC should issue a share certificate once the registrar has determined that the requirements have been met.