Private Limited to One Person Company
The Companies Act, 2013 allows a business to convert itself from a private limited company to OPC. Rule 7 of the Companies (Incorporation) Rules, 2014 deals with the conversion procedure.
Condition for Converting Private Limited Company to OPC
You can convert your private limited company to OPC only if:
- Its paid up share capital is not more than Rs. 50 Lakh, or
- During the relevant period, its average annual turnover was Rs. 2 Crore or less, and
- It is not a section 8 company, that is, a company which has charitable objects.
Here, relevant period means the period that comes immediately before 3 consecutive financial years.
Benefits of converting to OPC
- Faster decision making.
- Lesser compliance burden.
- Freedom of operation.
- Tax benefits.
- No need for a board of directors.
- One person can hold all the shares.
Steps to Convert Private Limited Company to OPC
You need to take the following steps before you can convert your private limited company to OPC:
- First and foremost, call a board meeting for passing a special resolution.
- Next, obtain a No Objection Certificate from existing members as well as creditors.
- Pass a special resolution for conversion.
- Call a general meeting.
- Send a copy of the special resolution to Registrar of Company within 30 days.
- Lastly, apply for conversion to the Registrar of Companies.
Fee for Converting Private Limited Company to OPC
The government fee for filing starts from as low as Rs. 200 and the professional fee starts from Rs. 5000.
Timeline for Converting Private Limited Company to OPC
Usually, the entire process of conversion takes anywhere between 25-35 days.
How PocketLawyer Can Help
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