Home / Private Limited to One Person Company (OPC)

Updated on 21 Sep 2021  9.00 AM IST | 4 min read

One Person Company (OPC) Definition

One person company is a new concept introduced in India which is owned and managed by a single entrepreneur whereas in case of private limited company, two or more persons are needed to incorporate a private limited company. A nominee must be registered in case of OPC at the time of registration in form INC-3. The proposed director must have DIN & DSC and he/she should be a citizen of India. There is no need to change the office location of the previous private limited company.

Many persons now days transferring their private limited company into one Person Company. For making conversion from private limited company into one Person Company (OPC), the private limited company must have total paid up capital of Rs.50 Lakhs or its annual average turnover in previous 3 financial years must be Rs.2 crores. OPC also needs a nominee director so that responsibility can be transferred to the nominee director, if the director of the company is unable to manage its business operations. An alteration is also needed to be done in MOA & AOA of the company.

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Requirements for Converting Private Limited Company into OPC

  1. As per section 8 of the company’s act 2013, private limited company should have share capital of Rs.50 Lakhs or annual average turnover of Rs.2 crores in the last three financial years in order to convert their company into OPC.
  2. The conversion should BE in accordance with the rule 7 of companies (incorporation) Rules, 2014.
  3. The company should take permission in writing from the existing members as well as creditors at the time of passing a special resolution in the general meeting. The existing members & creditors must have no objection in converting private limited company into OPC.
  4. For converting a private limited company into an OPC, the company is required to file special resolution with registrar of companies after getting approval from shareholders. Therefore, FORM MGT-14 should be filed along with the documents within 30 days of passing of special resolution with ROC.

Benefits of OPC

There are many benefits of using the new payroll system –

  • Less cost
  • Limited liability
  • Legal status
  • Corporate identity
  • Quick decision making
  • Easy bank operation
  • Flexibility in management
  • Tax burden reduction
  • Less compliances

Procedure Of Converting Private Company Into One Person Company (OPC)

  • Board meeting - In the first step, conduct a board meeting to get in-principal approval of directors to convert private company into one Person Company. Board meeting is held to discuss about the following –
    1. Fixing of date, time & place of EGM in order to get approval from shareholders by passing special resolution to convert private limited company into OPC.
    2. Approving EGM notice along with agenda & explanatory statement.
    3. Authorizing the director or company secretary to issue EGM notice after getting the approval from board.
  • General meeting notice – As per provision of section 10 of the companies act 2013, EGM notice is issued in writing 21 days before the meeting to the following persons mentioned below –
    1. All members
    2. All directors
    3. Company auditors
  • Conduct a general meeting – A general meeting is conducted to pass the special resolution by getting shareholders’ approval to convert private company into a one person company (OPC).
  • Form filing with ROC – In this step, E-form MGT-14 is to be filed with ROC within 30 days of passing of special resolution in the extra ordinary general meeting (EGM). In addition to form MGT-14, following attachments are to be filed along with E-form MGT-14 –
    1. Certified copy of special resolution
    2. Altered MOA
    3. Altered AOA
    4. Certified copy of board resolution (Optional attachment)
    5. EGM notice along with copy of explanatory statement
  • Filing form INC-6 - In addition to E-form MGT-14, E-form INC-6 is also needed to be filed along with the prescribed fees to the concerned ROC to convert private company into an OPC. The following attachments filed with E-form INC-6 are mentioned below –
    1. List of members
    2. List of creditors
    3. NOC from members & creditors
    4. Copy of no objection letter from creditors
    5. The latest audited P&L account as well as balance sheet.
  • Issuing of conversion certificate - After filing all the documents to ROC with the prescribed fees to convert private limited company to OPC, the concerned ROC will verify the form as well as the attached documents. After properly verifying all the documents and finding it satisfactory, ROC finally issues the certificate to convert private limited company to OPC.

FAQ’S about Converting Private Company Into One Person Company (OPC)

One person company is a company owned and managed by a single individual.
A person can become a member in only one OPC.
Form INC should be filed within –
  1. 30 days in case of voluntary conversion
  2. 6 months in case of mandatory conversion
An OPC can be mandatorily converted into private limited company if Paid up share capital of the proposed private limited company exceeds Rs.50 lakhs and annual average turnover of the company exceeds Rs.2 crores.
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Due Dates

  • GSTR-7 Summary of Tax Deducted at Source (TDS) and deposited under GST laws

     Sep 10th ,2021

  • GSTR-8 Summary of Tax Collected at Source (TCS) by e-commerce operators under GST laws

     Sep 10th ,2021

  • GSTR 1 for Aug 2021 (turnover more than INR. 1.50 Crore)

     Sep 11th ,2021

  • GSTR-6 Details of Input Tax Credit (ITC) received and distributed by an Input Service Distributor (ISD)

     Sep 13th ,2021

  • GSTR-3B is a summary return to be filed by all taxpayers except those registered under the composition scheme, every month. However, from 1st January 2021, there is also quarterly filing option provided to taxpayers with annual aggregate tunrover of up to Rs.5 crore, opting for the QRMP scheme for Aug Month. (Aggregate turnover exceeding Rs.5 crore in the previous financial year)
     

     Sep 20th ,2021

  • GSTR-3B is a summary return to be filed by all taxpayers except those registered under the composition scheme, every month. However, from 1st January 2021, there is also quarterly filing option provided to taxpayers with annual aggregate tunrover of up to Rs.5 crore, not opting for the QRMP scheme for Aug Month. (Aggregate turnover up to Rs.5 crore in the previous financial year)

     Sep 20th ,2021
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