Converting your private company to a One Person Company (OPC) can provide numerous benefits, including limited liability and reduced compliance requirements.
step-by-step guide on how to convert your private company to an OPC
Table of Contents
Step 1: Obtain a Digital Signature Certificate (DSC) and Director Identification Number (DIN)
The first step in converting your private company to an OPC is to obtain a Digital Signature Certificate (DSC) and Director Identification Number (DIN) for the proposed director. The DSC is required for online filing of the conversion documents, while the DIN is required to act as a director of the OPC.
Step 2: Hold a Board Meeting
Convene a board meeting of the private company to pass a resolution for the conversion to an OPC. The board resolution should include the approval for the conversion and authorize a director to file the necessary documents with the Registrar of Companies (ROC).
Step 3: Obtain the Consent of Shareholders
Obtain the consent of shareholders through a special resolution for the conversion of the private company to an OPC. A special resolution requires approval by at least 75% of the shareholders present or represented by proxy at the shareholders’ meeting.
Step 4: Prepare the Necessary Documents
The next step is to prepare the necessary documents for the conversion. These documents include the Memorandum and Articles of Association of the OPC and an affidavit by the proposed director confirming that he or she is the sole member of the OPC.
Step 5: File the Application for Conversion
Once the documents are prepared, file the application for conversion of the private company to an OPC with the ROC. The application should be filed in Form INC-6 and should be accompanied by the necessary documents, including the board resolution and special resolution.
Step 6: Wait for Approval
After the application is filed, the ROC will review the documents and verify the information provided. If everything is found to be in order, the ROC will issue a certificate of conversion to the OPC.
Step 7: Make Changes to the Company Name and Legal Status
After the OPC is formed, it is important to make the necessary changes to the company name and legal status. The words “One Person Company” should be added to the name of the company, and the company should be referred to as an OPC in all legal documents and communications.
Step 8: Update the Bank Accounts and Statutory Registrations
Update the bank accounts and statutory registrations with the new name and legal status of the OPC. This includes updating the PAN, TAN, GST registration, and other relevant registrations.
Step 9: Maintain Compliance with OPC Requirements
After the conversion is complete, the OPC is required to comply with certain requirements, including the requirement to file annual returns with the ROC and maintain proper books of accounts. The OPC is also required to inform the ROC within 30 days of any changes to the director or shareholder.
Conclusion
Conversion of Private Limited Company to OPC can provide numerous benefits, including reduced compliance requirements and limited liability. However, the process can be complex and requires careful planning and preparation. By following the step-by-step guide provided in this article, you can ensure a smooth and successful conversion of your private company to an OPC. It is important to consult with a legal professional to ensure compliance with all legal requirements and avoid any potential legal issues.
