Conversion of Private Company into OPC In Delhi
Conversion of Private Company into OPC involves a legal process in many jurisdictions, including India. Here’s a general overview of the steps involved in converting a private company into an OPC in India:
Conversion of Private Company into OPC
Check Eligibility Criteria: Ensure that the private company meets the eligibility criteria for conversion into an OPC. In many jurisdictions, only certain types of private companies may be converted into OPCs.
Obtain Director Identification Number (DIN): If the existing private company does not already have a Director Identification Number (DIN) for the proposed sole member/director of the OPC, it needs to be obtained.
Obtain Digital Signature Certificate (DSC): The proposed sole member/director needs to obtain a Digital Signature Certificate (DSC) for filing forms electronically with the Registrar of Companies (RoC).
Pass Board Resolution: Hold a board meeting to pass a resolution approving the Conversion of Private Company into OPC. The resolution should also authorize a director to make necessary filings with the RoC.
Amend Memorandum and Articles of Association: Amend the Memorandum and Articles of Association of the private company to reflect the conversion into an OPC. This may involve altering the clauses related to the company’s structure, share capital, and other relevant provisions.
Obtain Consent: Obtain consent from the sole member/director to act as such in the OPC. This consent needs to be filed with the RoC along with other required documents.
File Form with RoC: Prepare and file the necessary forms with the RoC for the conversion of the private company into an OPC. These forms typically include:
Form INC-5: Application for conversion of a private company into an OPC.
Form INC-6: Declaration for conversion of a private company into an OPC.
Form INC-22: Notice of situation of the registered office of the OPC.
Payment of Fees: Pay the requisite fees for filing the forms with the RoC. The fees may vary depending on the jurisdiction and the authorized capital of the OPC.
Verification by RoC: The RoC will verify the documents and forms submitted for conversion. If everything is in order and complies with the applicable laws, the RoC will issue a fresh Certificate of Incorporation reflecting the OPC status.
Compliance with Post-Conversion Requirements: After the conversion, ensure compliance with any post-conversion requirements such as updating statutory registers, obtaining new PAN, GST registrations, etc.
Benefits of conversion from PLC to OPC
Limited Liability: Like a private limited company, an OPC offers limited liability protection to its owner. This means that the personal assets of the owner are protected in case of business debts or liabilities, up to the extent of their investment in the company.
Ease of Management: OPCs are easier to manage compared to private limited companies since they require only one person to operate. This reduces the administrative burden associated with managing multiple directors and shareholders.
Sole Ownership: In an OPC, there is only one owner who has full control over the company’s operations and decision-making process. This allows for faster decision-making and greater autonomy in running the business.
Separate Legal Entity: Just like private limited companies, OPCs are considered separate legal entities distinct from their owners. This enables the owner to enter into contracts, acquire assets, and incur liabilities in the name of the company, thereby providing credibility and enhancing business opportunities.
Flexibility in Ownership: OPCs allow for the conversion of a sole proprietorship or partnership into a corporate entity while still maintaining the benefits of limited liability and corporate structure.
Tax Benefits: OPCs may enjoy certain tax benefits and incentives offered by the government for small businesses or startups. Additionally, OPCs are taxed at the corporate tax rate, which may be favorable compared to personal income tax rates in some jurisdictions.
Perpetual Succession: OPCs enjoy perpetual succession, meaning that the company continues to exist even in the event of the death or incapacity of the owner. This provides continuity and stability to the business operations.
Enhanced Credibility: Operating as an OPC may enhance the credibility and reputation of the business, especially when dealing with clients, suppliers, and financial institutions, as it signifies a formal corporate structure.
Minimal Compliance Requirements: OPCs typically have fewer compliance requirements compared to private limited companies, especially regarding board meetings, annual general meetings, and other statutory filings.
Lower Compliance Costs: Due to the simplified structure and reduced compliance requirements, OPCs may incur lower compliance costs compared to private limited companies, making them more cost-effective to operate and maintain.
Checklist Requirements For The Conversion of Private Company into OPC
Eligibility Check: Ensure that the private company is eligible for conversion into an OPC based on the laws and regulations of the jurisdiction where the company is registered.
Board Resolution: Hold a board meeting to pass a resolution approving the conversion of the private company into an OPC.
Authorize a director to make necessary filings with the Registrar of Companies (RoC).
Director Identification Number (DIN): Obtain Director Identification Numbers (DINs) for the proposed sole member/director of the OPC if not already obtained.
Digital Signature Certificate (DSC): Obtain Digital Signature Certificates (DSCs) for the proposed sole member/director for filing forms electronically with the RoC.
Amend Memorandum and Articles of Association: Amend the Memorandum and Articles of Association of the private company to reflect the conversion into an OPC.
Alter clauses related to the company’s structure, share capital, and other relevant provisions as per OPC requirements.
Consent from Sole Member/Director: Obtain consent from the sole member/director to act as such in the OPC.
Preparation of Forms: Prepare necessary forms required for conversion, including Form INC-5, Form INC-6, and Form INC-22.
Filing Forms with Roc:
File Form INC-6: Declaration for conversion of a private company into an OPC.
File Form INC-22: Notice of situation of the registered office of the OPC.
Payment of Fees: Pay the requisite fees for filing the forms with the Roc.
Verification by Roc: The Roc will verify the documents and forms submitted for conversion.
Issuance of Certificate of Incorporation: Upon successful verification, the Roc will issue a fresh Certificate of Incorporation reflecting the OPC status.
Post-Conversion Compliance: Update statutory registers and records as per OPC requirements. Obtain new PAN, GST registrations, and other necessary registrations. Ensure compliance with any additional post-conversion requirements specified by the regulatory authorities.
Communication with Stakeholders: Notify stakeholders, including employees, vendors, and customers, about the conversion and any changes that may affect them.
Bank Accounts and Contracts: Update bank accounts and contracts to reflect the new status of the company as an OPC.
Annual Compliance: Ensure compliance with annual filing requirements and other ongoing compliance obligations for OPCs. File Form INC-5: Application for Conversion of Private Company into OPC contact us now.
How To Apply For Conversion of Private Company into OPC?
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Post-Conversion Requirements by the OPC
Change in Name: After conversion, the OPC must update its name to reflect its status as a One Person Company. This includes updating its name on all legal documents, stationery, and communication materials.
Appointment of Nominee: As per the Companies Act, 2013, an OPC must have a nominee who will become the member of the OPC in case the sole member (the owner) becomes incapacitated or dies. The nominee needs to provide their written consent for the appointment, and their details must be submitted to the Registrar of Companies (RoC) during the conversion process.
Board Meetings: While an OPC only has one member, it is still required to hold at least one board meeting each year. The sole member of the OPC acts as the director and must conduct the board meeting to discuss the financial statements, accounts, and other relevant matters
Annual Compliance: Like other types of companies, OPCs are required to comply with annual filing requirements prescribed by the Companies Act, 2013. This includes filing annual financial statements (such as balance sheet, profit and loss account, and cash flow statement) and annual returns with the RoC within the specified timelines.
Maintaining Statutory Registers: The OPC is required to maintain statutory registers as prescribed under the Companies Act, 2013. These registers include registers of members, directors, and other key personnel, as well as registers for shareholding, transfers, and debentures, if applicable.
Statutory Auditor Appointment: OPCs must appoint a statutory auditor within 30 days of incorporation. The auditor must be a practicing chartered accountant in India.
Tax Compliance: The OPC must comply with tax regulations, including filing income tax returns, GST returns (if applicable), and other tax-related obligations.
Compliance with Other Laws: Apart from the Companies Act, 2013, OPCs need to comply with other applicable laws and regulations, including labor laws, environmental laws, and any industry-specific regulations.
Changes in Share Capital: If there are any changes in the share capital of the OPC, such as an increase or decrease in authorized or paid-up capital, the OPC must comply with the procedures specified under the Companies Act, 2013.
Maintaining Registered Office: The OPC must maintain a registered office address and inform the RoC about any changes in the registered office address within the prescribed timelines.