This brief write up an attempt has been made to unlock the technicalities related to the Conversion of a Private Company into One Person Company prescribed under the Companies Act, 2013.
I believe that the procedure for Conversion of a Private Limited Company into One Person Company through this article would be of some help for you all.
Conversion of the status of Company from private to OPC would become effective form the date of receipt of the approval of the Registrar through the change of name would become effective on the issue of fresh Certificate of Incorporation.
The Companies Act, 2013 was expected to simplify the provisions but on the contrary, it brought a lot of restrictions on doing business. Therefore, private companies are converting themselves into One Person Company.
OPC can be easily managed with less compliance to be followed, conversion of the Sole Proprietor firm or Partnership or Private Limited Company to One Person Company would benefit most people.
Legal Provisions related to Conversion of Private Company into OPC are given in Section 18 the Companies Act, 2013 read with Rule 7 of Companies (Incorporation) Rules, 2014.
Bare Act Language of Section 18 of the Companies Act, 2013 and Rule 7 of Companies (Incorporation) Rules, 2014 given at the end of Article.
“Note: A private Company other than a Company registered under Section 8 companies Act 2013, who having a share capital of 50 lakhs rupees or those having an average annual turnover is 2 crore rupees during the relevant period, may convert their private Company into one-person Company.”
PROCEDURE/STEPS FOR CONVERSION OF PRIVATE COMPANY INTO ONE PERSON COMPANY:
|A.||BOARD MEETING||ISSUE NOTICE in accordance with the provisions of section 173(3) of the Companies Act, 2013, for convening a meeting of the Board of Directors. The main agenda for this Board meeting would be:|
To Get in-principal approval of Directors for Conversion of Private Company into One Person Company (OPC).
Fix date, time, and place for holding Extra-ordinary General meeting (EGM) to get the approval of shareholders, by way of Special Resolution, for Conversion of Private Company into One Person Company (OPC).
To approve the notice of EGM along with Agenda and Explanatory Statement to be annexed to the notice of General Meeting as per section 102(1) of the Companies Act, 2013;
To authorize the Director or Company Secretary to issue Notice of the Extra-ordinary General meeting (EGM) as approved by the board.
|Important Note:||Before passing such a special resolution, the Company shall obtain No Objection Certificate in writing from existing members and creditors.|
|B.||NOTICE OF GENERAL MEETING:
|Provisions of Section 101 of the Companies Act 2013 provides for issue of notice of EGM in writing to below mentions at least 21 days before the actual date of the EGM:
|C.||CONVENE A GENERAL MEETING:||
|D.||ROC FORM FILING||For conversion of private Company in OPC under section 18, few E-forms will be filed with concerned Registrar of Companies at different stages as per the details given below|
|E- Form MGT.14||As per Section 117(3)
Copy of this special resolution is required to be filed with concerned ROC through the filing of form MGT.14 within 30 days of passing Special Resolution in the EGM
i. Notice of EGM along with a copy of the explanatory statement under section 102;
ii. Certified True copy of Special Resolution;
iii. Altered memorandum of association;
iv. Altered Articles of association
v. Certified True copy of Board Resolution may be attached as an optional attachment.
|It is relevant to note that First you have to file form MGT.14 as SRN No. of form MGT.14 will be used in form INC.6|
|E- Form INC.6||Accordingly, an Application for conversion of a Private Company into an OPC is required to be filed in e-Form INC.6 to the ROC concerned, with all the necessary annexure and with the prescribed fee.|
i. The list of members and list of creditors.
ii. The latest Audited Balance Sheet and the Profit and Loss Account; and
iii. The copy of No Objection letter of secured creditors.
iv. NOC of Members and Creditors.
v. The directors of the Company shall give a declaration by way of an affidavit duly sworn in confirming that all members and creditors of the Company have given their consent for conversion, the paid-up share capital Company is fifty lakhs rupees or less or average annual turnover is less than two crores rupees, as the case may be.
Other information if any can be provided as an optional attachment
|Duty of ROC:
Concerned Registrar of Companies (ROC) will check the E-forms and attached documents filed by the Company for Conversion of Private Company into One Person Company (OPC). On being satisfied that Company has complied with prescribed requirements the Registrar shall issue the Certificate to the effect of Conversion of Private Company into One Person Company (OPC).
POST CONVERSION REQUIREMENTS
|A.||Arrange new PAN No. of the Company|
|B.||Arrange new stationery with the new name of the Company|
|C.||Update Company bank account details|
|D.||Intimate all the concerned authorities like Excise and sales tax etc about the status change|
|E.||A printed copy of the new MOA & AOA.|
Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at [email protected]).
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness, and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not professional advice and is subject to change without notice. I assume no responsibility for the consequences of the use of such information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION