MCA Form INC-6 – One Person Company – Application for Conversion
MCA Form INC-6 – One Person Company – Application for Conversion
The Ministry of Corporate Affairs has introduced a simplified process for converting a company into a Person Company (OPC). This process is facilitated by filing MCA Form INC-6, which serves as the application for conversion. Form INC-6 is designed to streamline the conversion process and furnish a convenient and efficient way for companies to transition to the OPC structure. In this article, we will delve into the critical aspects of MCA Form INC-6, discussing its purpose, the required information and documents, and the process involved in converting a company into a One Person Company.
One Person Company (OPC)
One Person Company (OPC) refers to a form of company with only one person as a member, unlike a private company where the minimum number of members is two, or a public company with seven members. Section 18 of the Companies Act, 2013, and Rule 6 of the Companies (Incorporation) Rules, 2014, explicitly provide provisions for converting One Person Company (OPC) to other forms of the Company.
Conversion of One Person Company
One Person Company (OPC) has two ways to Conversion into Other Forms of the Company:
Voluntary conversion into a private/public limited company is not permitted unless two years have expired from the date of incorporation of the One Person Company (OPC). However, if the paid-up share capital of the One Person Company (OPC) exceeds rupees 50 lakhs or if its average turnover exceeds rupees 2 Crores, then such One Person Company (OPC) could convert itself into a private limited company within two months. In case of voluntary conversion, One Person Company (OPC) has to intimate the concerned Registrar of Companies (ROC) in form INC-5 within 60 days.
One Person Company (OPC) has to mandatorily convert itself into Private/Public in the following scenarios:
- Paid-up-up share capital exceeds Rs. 50 lakhs or
- The yearly turnover of immediately previous three consecutive financial years is more than 2 Crores rupees
- Such conversion is then six months from when the paid-up capital exceeds Rs. 50 Lakhs or the corresponding period in which the average annual turnover exceeds Rs. 2 Crores.
Purpose of the Form INC-6
- As mentioned above, Form INC-6 must be filed in case OPC is converted into a private or public or private company into OPC.
- In case the paid-up share capital of a One Person Company exceeds fifty lakh rupees or its average annual turnover during the relevant period exceeds two crore rupees, it shall make an application in Form INC-6 within six months from the effective date on which the above threshold limit was exceeded.
- However, if any Person Company wants to convert itself into a private/public company, it can also voluntarily apply through Form INC-6 after two years of incorporation.
- A private company can also apply for conversion into One Person Company by filing Form INC-6.
Laws Governing the Form INC-6
To understand the purpose of filing Form INC-6, we must understand the act according to which it is required to be filed.
Section 18 of the Companies Act, 2013
According to Section 18 of the Companies Act, a company of any class registered under the Companies Act may convert itself to a company of another class by altering of memorandum and articles of the company.
On submission of the application, the Registrar will proceed with verification of the application & documents and issue a certificate of incorporation in the same manner as its first registration.
Note: The registration of a company under Section 18 shall not affect any debts, liabilities, obligations, or contracts incurred or entered into by or on behalf of the company before conversion.
Rule 7 of the Companies Act, 2013
Rule 7 of the Companies Act 2013 states the procedure to convert a private limited company into One Person Company.
Procedure to Convert Private Company to OPC
A private company other than a company registered under section 8 of the Companies Act having paid-up share capital of rupees 50 lakhs or less or average annual turnover during the relevant period as defined in explanation to rule 8(4) is rupees 2 crores or less may convert itself into OPC by passing a special resolution in the general meeting.
- Before passing such a resolution, the company shall obtain No objection in writing from members and creditors.
- The company shall file a copy of the special resolution with the Registrar of Companies within thirty days from the date of passing such resolution in Form No. MGT-14.
- The company shall apply Form No.INC-6 for its conversion into OPC along with fees as provided in Companies (Registration offices and fees) Rules, 2014, by attaching the following documents:
- Directors of the company shall give a declaration by way of an affidavit duly sworn in conforming that all members and creditors of the company have given their consent for conversion, the paid-up capital company is rupees 50 lakhs, or less or turnover is less than rupees 2 Crores
- List of members and list of creditors
- Latest Audited Balance Sheet on the Profit and Loss Account
- Copy of No Objection letter of secured creditors
Condition for Filing Form INC-6
Authorized capital and paid-up capital of the company
- Minimum 1 lakh in case of conversion of OPC into a private company or conversion of Private Company into OPC
- Minimum 5 lahks in case of conversion of OPC into a public company
Maximum number of members
- Minimum 2 and maximum 200 in case of conversion of OPC into a private company
- 7 in case of conversion of OPC into a public company
- 1 in case of conversion of Private Company into OPC
Applicable Fee Form INC-6
The fee details for filing Form INC-6 – One Person Company- Application for Conversion are tabulated here. The form filing fee rates are provided as per the Companies (Registration of Offices and Fees) Rules, 2014
Fee for Company having Share Capital
|Sl.No||Nominal Share Capital||Fee Applicable|
|1||Less than Rs.1,00,000||Rs.200|
|2||Rs.1,00,000 to Rs.4,99,999||Rs.300|
|3||Rs.5,00,000 to Rs.24,99,999||Rs.400|
|4||Rs.25,00,000 to Rs.99,99,999||Rs.500|
|5||Rs.1,00,00,000 or more||Rs.600|
Fee for Company not having Share Capital
In case the company does not have a share capital, the fee for intimating the DIN by the company to the Registrar is Rs.200 per document.
|Period of delays Fee applicable||
Period of delays Fee applicable
|1||Up to 30 days||Two times of average fees|
|2||More than 30 days and up to 60 days||Four times normal fees|
|3||More than 60 days and up to 90 days||Six times normal fees|
|4||More than 90 days and up to 180 days||Ten times of normal fees|
|5||More than 180 days||12 times normal fees|
It is mandatory to attach the following documents with the Form INC-6 for conversion of OPC into any form of company
- Altered Memorandum of Association
- Altered Articles of Association
- Copy of the duly audited and certified latest financial statement
- Copy of board resolution authorizing giving of notice
In case of conversion of a private company into OPC, the following attachments are mandatory:
- A certified true copy of minutes, list of creditors, and list of members
- Copy of NOC of every creditor
- Consent of the nominee in Form No. INC-3, along with all enclosures
- Copy of PAN card of the nominee and member
- Proof of identity of the nominee and member
- Residential proof of the nominee and member
It is mandatory to attach a certificate from Chartered Accountant if the conversion is because of exceeding average annual turnover.
Procedure for Filing of Form INC-6
The following steps can be used for filing Form INC-6 on the MCA portal.
- The applicant needs to access the official website of the Ministry of Corporate Affairs to file Form INC-6. By login into the portal, the applicant can upload Form INC-6.
- In the case of the Conversion of OPC into a private company or the Conversion of OPC into a public company, the user must fill parts A and B of the eForm.
- In the case of the Conversion of a Private company into an OPC option, the user will be required to fill in parts B and C of the eForm
After login to the portal, enter a valid CIN of the company for conversion of OPC.
Details Required in Part A of Form
- Ensure that the data you enter in this form is the same as the date on which the paid-up share capital or average annual turnover of the company has exceeded the threshold limit.
- Enter the amount (paid-up capital or average annual turnover) by which the OPC has exceeded the threshold limit User is required to make sure that the date and amount entered should be the same as mentioned in eForm INC-5.
- Specify the relevant period (in case turnover is selected)
Details Required in Part B
- Details of a special resolution authorizing the conversion of the company (eForm MGT-14)
- Enter the authorized and paid-up capital of the company
- Enter the maximum number of members of the company
Details Required in Part C
- This part is required to be filled in case of conversion of a private company into OPC.
- Enter an approved DIN if any of the sole members of the OPC is subsequently upon conversion.
Select any one of the options from the drop-down values for declaration and digitally sign Form INC-6.
Digitally Sign the Form
- If the person digitally signing Form INC-6 is a Director, an approved DIN must be provided.
- If the person digitally signing the Form INC-6 is Manager/CFO/CEO, enter approved DIN or valid income-tax PAN.
- A membership number needs to be filed in case the person digitally signing Form INC-6 is Company Secretary.
The required document can be uploaded by clicking on the attach button and clicking on the pay the payment button to make the fee.
On successful submission of Form INC-6, the eForm will be processed by the office of the Registrar of Companies.
SRN will be generated and displayed to the applicant upon successfully submitting Form INC-6. This SRN will be used for future correspondence with MCA.
On successful submission, a challan will be generated depicting the details of the fees the user pays to the Ministry. It is the acknowledgment to the applicant that Form INC-6 has been filed.
When the Form INC-6 is completely processed by the authority, an acknowledgment will be sent to the official mail of the company
Get a Certificate of Incorporation
A fresh certificate of incorporation consequent on conversion is generated and sent to the user as an attachment to the email.