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MCA Form INC-6 – One Person Company – Application for Conversion

Form INC-6 is required to be filed in case of conversion of a One Person Company (OPC)  into a private limited company or public limited company or conversion of a private limited company into a One Person Company. The present article briefs the procedure to file Form INC-6 – One Person Company – Application for Conversion

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One Person Company (OPC)

One Person Company (OPC) refers to a form of company that has only one person as a member, unlike a private company where the minimum number of members is two or a public company where the minimum number of members is seven. Section 18 of the Companies Act, 2013 and Rule 6 of the Companies (Incorporation) Rules, 2014, explicitly provide provisions for the conversion of One Person Company (OPC) to other forms of the Company.

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Conversion of One Person Company

One Person Company (OPC) has two ways for Conversion into Other Forms of the Company:

Voluntary Conversion

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.

Mandatory/Compulsory Conversion

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 6 months from the date when the paid-up capital exceeds Rs. 50 Lakhs or the related period in which average annual turnover exceeds Rs. 2 Crores.

Purpose of the Form INC-6

• As mentioned above, Form INC-6 is required to be filed in case of conversion of OPC into private or public or conversion of 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 6 months from the effective date on which the above threshold limit was exceeded
• However, if any Person Company wants to convert itself into private/public company then also it can voluntarily apply through Form INC-6 after two years of its incorporation.
•  A private company can also make an application for conversion into One Person Company by filing Form INC-6.

Laws Governing the Form INC-6

To understand the purpose of filing the 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 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

Form MGT-14 (in case of conversion of OPC) and form INC-5 (in case of mandatory conversion of OPC) must have been filed and approved before filing this eForm.

Authorized capital and paid-up capital of the company

• Minimum 1 lakh in case of conversion of OPC into private company or conversion of Private Company into OPC
• Minimum 5 lakh 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 the 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.

Additional Fees

Sl.No	Period of delays Fee applicable	Period of delays Fee applicable
1	Up to 30 days	2 times of normal fees
2	More than 30 days and up to 60 days	4 times normal fees
3	More than 60 days and up to 90 days	6 times normal fees
4	More than 90 days and up to 180 days	10 times of normal fees
5	More than 180 days	12 times normal fees

Documents Required

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:

• Affidavit
• 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.

Note:

• In the case of Conversion of OPC into a private company or Conversion of OPC into a public company, the user is required to fill parts A and B of the eForm.
• In the case of Conversion of a Private company into an OPC option, the user will be required to fill 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 subsequent upon conversion

Select any one of the options from the drop-down values for declaration and digitally sign the Form INC-6.

Digitally Sign the Form

• In case the person digitally signing the Form INC-6 is a Director, an approved DIN needs to be provided.
• In case the person digitally signing the Form INC-6 is Manager/CFO/CEO, enter approved DIN or valid income-tax PAN.
• Membership number needs to be filed, in case the person digitally signing the Form INC-6 is Company Secretary

Attach Document

By clicking on the attach button, the required document can be uploaded, and click on the pay the payment button for making the fee.

Submit Form

On successful submission of the Form INC-6, the eForm will be processed by the office of the Registrar of Companies.

SRN Generation

SRN will be generated and displayed to the applicant on successful submission of the Form INC-6. This SRN will be used for future correspondence with MCA.

Challan Generation

On successful submission, a challan will be generated depicting the details of the fees paid by the user to the Ministry. It is the acknowledgment to the applicant that Form INC-6 has been filed.

Email

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.