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Experience easy PLC to OPC conversion services with our experts. We deliver personalized, end-to-end better services throughout the process.

What's included:

  • Application with MCA
  • Document preparation support
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Experience easy PLC to OPC conversion services with our experts. We deliver personalized, end-to-end better services throughout the process.

What's included:

  • Query Submission
  • Govt Approval Support

Conversion of Private Limited Company to One Person Company 

One Person Company (OPC) is a relatively new business concept introduced under the Companies Act 2013. As the name suggests, it allows for the registration of a company with a single individual as its sole owner. On the other hand, a Private Company is a type of company privately held by a small group of individuals. The Companies Act 2013 provides the provision for converting one class of companies to another. In some instances, private limited companies may choose to convert into OPCs due to the need for less legal compliance. 

Considering a shift to a simpler business model? Let IndiaFilings help you seamlessly convert your Private Limited Company into a One Person Company under the Companies Act, 2013.

Private Limited Company

The Companies Act 2013 defines a Private Limited Company under Section 2(68). It is a privately held company or closed corporation where the shares are not traded publicly. The1 of a Private Company imposes restrictions on the transferability of shares. 

  • The maximum number of members in a Private Company is limited to 200 as per Section 2(68) of the Companies Act, 2013.
  • Each member's liability is limited to their shares only, and shareholders can sell them in the event of company losses. 
  • Private Companies enjoy perpetual existence, even in member death, bankruptcy, or insolvency cases.

One Person Company (OPC)

Under the Companies Act 2013, One Person Company (OPC) is defined under Section 2(62). It is a company with only one person as its member. 

  • In an OPC, the compliance requirements are relatively less stringent than other types of companies under the Act.
  • One unique feature of an OPC is that the sole member must nominate someone while registering the OPC.
  • In the event of the sole member's death, the nominee can become the sole member of the OPC or reject the position. 

Compared to other types of companies, OPCs enjoy several privileges and exemptions per the Companies Act 2013.

Law Governing - Conversion of a Private Company into an OPC

The following legal provisions govern the conversion of a Private Company into an OPC: 

  • Section 18 of the Companies Act, 2013
  • Rule 7 of the Companies (Incorporation) Rules, 2014

These provisions outline the specific regulations and procedures for the conversion process. By adhering to these legal provisions, a Private Company can convert into an OPC while ensuring compliance with the applicable laws and regulations.

Benefits of Converting a Company to OPC

Converting a company to OPC (One Person Company) offers several advantages.

1. Simplified Management & Decision-Making

  • With only one owner, decisions can be made quickly without needing board or shareholder approval.
  • No conflicts between multiple directors or shareholders.

2. Reduced Compliance Burden

  • Fewer annual filings and ROC (Registrar of Companies) compliances compared to a private limited company.
  • Exemption from holding Annual General Meetings (AGM), Board Meetings, and other procedural requirements.

3. Lower Costs of Compliance & Administration

  • Less paperwork and reduced costs for statutory audits, maintaining registers, and issuing share certificates.

4. Complete Control & Ownership

  • The sole member enjoys full control over decision-making while still enjoying the status and credibility of a corporate entity.

5. Limited Liability Protection

  • The owner’s personal assets remain protected—liability is limited to the capital invested in the company.

6. Better Legal Status than a Sole Proprietorship

  • OPC enjoys separate legal entity status, enhancing credibility with banks, vendors, and clients.

7. Ease in Raising Funds & Obtaining Loans

  • Banks and financial institutions are more comfortable lending to a registered company than to an unregistered sole proprietorship.

8. Tax Advantages

  • Eligible for small business tax benefits and corporate tax rates, which can be more favorable than personal income tax rates.

9. Business Continuity

  • Nominee director ensures the company’s continuity in case of the owner’s incapacity or death, unlike sole proprietorships which end with the proprietor.

10. Flexibility to Convert Back or Scale Up

  • OPC can be converted back to a Private Limited Company when the business grows beyond OPC thresholds (e.g., paid-up share capital or turnover limits).

Conditions for Conversion of Private Limited Company into OPC

Conversion of a Private Company into an OPC is subject to certain conditions, which include:

  • Paid-up Share Capital: The company's paid-up share capital should be less than 50 lakh Rupees.
  • Annual Turnover: The company's turnover should not exceed 2 Crores Rupees in the three consecutive financial years preceding the conversion.
  • Shareholder's Nationality: The shareholder of the new OPC must be an Indian citizen.
  • Shareholder's Residential Status: The shareholder of the new OPC should be a resident of India. When a person stays in India for at least 180 days in a calendar year, they are considered a resident.
  • Ownership Limit: The shareholder should not hold any other OPC or be a member of any other OPC.
  • Exclusion of Minors: A minor cannot be a part or member of an OPC.

Process for Converting Private Limited Company to OPC

The procedure for converting the private limited company to a One-Person Company is as follows:

Step 1: Hold Board Meeting  

To initiate the conversion process of a private company into an OPC, the company directors need to convene a board meeting. During this meeting, the following agenda items should be discussed:

  • Approval from the Directors: The company's directors should approve converting the private company into an OPC. This signifies their agreement with the proposed change.
  • Fixing the EGM Details: The directors must decide on the date, time, day, and venue for the Extraordinary General Meeting (EGM), where the shareholders will vote on the conversion. These details need to be finalized and included in the notice.
  • Approval of EGM Notice: The directors should review and approve the notice for the EGM, along with its agenda and explanatory statement. The notice must accurately convey the purpose of the meeting and provide relevant information to the shareholders regarding the proposed conversion.
  • Authorization to Issue EGM Notice: A director or other designated person should be authorized by the board to issue the EGM notice. This person will be responsible for sending the notice within the specified timeframe.

All board members should receive a meeting notice at least seven days before. It should include the agenda items mentioned above. Additionally, the notice must be passed as a special resolution, indicating the shareholders' consent for converting the private company into an OPC.

Step 2: Call an Extraordinary General Meeting (EGM)

The company must formally notify its directors, members, and auditors to convene an Extraordinary General Meeting (EGM). This notice serves as an invitation to attend the EGM and must be dispatched to all relevant parties at least 21 days before the scheduled date of the meeting.

Step 3: NOC From Creditors

Before passing a special resolution in the Extraordinary General Meeting (EGM) for the company's conversion, obtaining a No Objection Certificate (NOC) from the existing creditors and shareholders is essential. This NOC serves as a written confirmation from the creditors and shareholders, indicating that they have no objection to the proposed conversion of the company into a One Person Company (OPC).

Step 4: Hold Extraordinary General Meetings (EGM)

The Extraordinary General Meeting (EGM) should be conducted at the designated time, date, and location specified in the notice. The EGM serves various purposes, including:

  • Checking for the quorum of the meeting: It is essential to ensure that the minimum number of members required for a valid session is present. The quorum is determined by the company's articles of association or as prescribed by law.
  • Checking for the presence of the company auditor: The attendance of the company auditor should be verified. If the auditor cannot attend, it is necessary to determine if they have been granted leave of absence as per Section 146 of the Companies Act, 2013.
  • Passing a special resolution: The primary objective of the EGM is to seek shareholders' approval for the company's conversion into a One Person Company (OPC). A special resolution must be passed, indicating the shareholders' consensus on the conversion.

Additionally, approval for the altered Memorandum of Association (MOA) and Articles of Association (AOA) should also be obtained during the meeting.

Step 5: Filing of Relevant Form to RoC

To convert a private company into a One Person Company (OPC), the company must file specific e-forms with the Registrar of Companies (ROC). The following forms need to be filed: 

  • Form MGT-14: This form should be filed with the MCA within 30 days of passing the special resolution for converting the private limited company into an OPC.  Form MGT-14 contains details regarding the resolution passed by the shareholders, and it is essential to submit this form within the specified timeframe. 
  • Form INC-6: The application for converting a private company into an OPC should be filed with the ROC using Form INC-6. Along with the form, the company must submit the necessary documents. Form INC-6 serves as the application form for the conversion process, providing information about the company and its shareholders.

Step 6: Submit Documents

Certain documents and the respective forms must be provided when converting a company to OPC. The following attachments should accompany the Form MGT-14:

  • A copy of the Extraordinary General Meeting (EGM) notice and the explanatory statement.
  • A copy of the special resolution passed during the EGM
  • The altered Memorandum of Association (MOA) and Articles of Association (AOA) of the company
  • A copy of the board resolution approving the conversion

For Form INC-6, the following attachments are required:

  • A complete list of creditors and members of the company
  • The latest balance sheet of the company
  • No Objection Certificate (NOC) from secured creditors
  • The NOC from both creditors and members

Moreover, the directors should provide a duly sworn affidavit confirming the consent of all creditors and members of the company.

Step 7: Issue of Certificate

After verifying the e-Forms and accompanying documents submitted by the company for the conversion into an OPC, the Registrar of Companies (RoC) will carefully assess compliance with the prescribed requirements. Once the RoC is satisfied that the private company has fulfilled all the necessary criteria, they will issue a Share Certificate to acknowledge the successful conversion of the private company into an OPC.

This Share Certificate serves as a legal document indicating the change in the company's status and confirms the ownership of shares in the newly converted OPC. It is a vital record that reflects the transition from a private company to an OPC.

Post Conversion Requirements

After the conversion of a company into a One Person Company (OPC), the following post-conversion requirements need to be fulfilled:

  • Obtain a New PAN Card: Apply for a new PAN card for the OPC, as the PAN card of the private company will no longer be valid. This is necessary for conducting business transactions and complying with tax obligations.
  • Update Stationery: Arrange for new stationery, including letterheads, invoices, and other official documents, with the updated name and details of the OPC. This ensures consistency in branding and communication.
  • Update Bank Account Details: Inform the bank about the conversion and update the company's bank account details to reflect the new OPC status. This ensures smooth banking operations and avoids any confusion in financial transactions.
  • Notify Concerned Authorities: Inform the relevant authorities about the status change of the company. This includes notifying the Goods and Services Tax (GST) department, Income Tax Department, and any other regulatory bodies as per the nature of your business. This ensures compliance with applicable laws and regulations.
  • Print Altered MOA and AOA: Print copies of the altered Memorandum of Association (MOA) and the OPC Articles of Association (AOA). 

By fulfilling these post-conversion requirements, the OPC ensures legal and operational compliance, maintains accurate records, and facilitates a smooth transition into its new structure.

Convert Your Private Limited Company to OPC Easily with IndiaFilings

Ready to simplify your business structure and enjoy the benefits of a One Person Company? IndiaFilings makes the conversion of your Private Limited Company to an OPC seamless and hassle-free. From preparing board resolutions and filing necessary forms to obtaining approvals from the Registrar of Companies, our expert team handles the entire process with precision and compliance. 

Let IndiaFilings guide you every step of the way so you can focus on growing your business while we take care of the legal formalities. 

Start your OPC conversion today with IndiaFilings!

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Frequently asked questions

Common questions about Convertion of Private Limited Company to OPC.

An LLP (Limited Liability Partnership) is a hybrid business structure that combines the benefits of a partnership and a company. Businesses may consider converting their LLP to a Private Limited Company to access enhanced growth opportunities, attract equity investments more easily, benefit from lower tax rates, and gain improved market credibility.
To convert an LLP to a Private Limited Company, the LLP must have at least two partners, obtain unanimous approval from all partners, have no unresolved liabilities, and secure approval for the proposed company name from the Registrar of Companies (RoC).
The conversion process is governed by Section 366 of the Companies Act, 2013, and the Companies (Authorised to Register) Rules, 2014. These regulations outline the requirements, processes, and obligations for a successful transition.
Some of the main benefits include facilitating business growth, enabling convenient capital raising through equity or debentures, enjoying lower tax rates, benefiting from tax exemptions, preserving existing goodwill, and enhancing opportunities for foreign investments.
Upon registration as a Private Limited Company, all properties, assets, and actionable claims of the LLP automatically vest in the new company. However, pre-existing liabilities, debts, and legal proceedings against the LLP remain binding on the converted entity.
The key documents include a list of partners and proposed shareholdings, a list of first directors, the LLP's latest income tax returns, consent from secured creditors, copies of published notices, and audited financial statements, among others.
After satisfying all legal requirements and resolving any objections, the Registrar of Companies (RoC) issues a Certificate of Incorporation (Form INC-11), marking the successful conversion and incorporation of the new Private Limited Company.
As per Section 374 of the Companies Act, once the LLP is registered as a Private Limited Company, it is deemed dissolved under the Limited Liability Partnership Act, 2008, without any further action required.
No, an LLP with outstanding unsecured debts cannot convert to a Private Limited Company unless it obtains written consent from its creditors before initiating the conversion process.
No, the conversion of an LLP to a Private Limited Company is exempt from capital gains tax, allowing the new entity to carry forward unabsorbed depreciation and losses from the LLP.