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Convert OPC to Private Limited Company

A One Person Company can convert into a private limited company to bring in co-founders, raise equity, and issue ESOPs. Since 2021, the conversion is voluntary at any time, done by a special resolution and the filing of Form INC-6. Samkhya handles your OPC-to-private conversion end to end.

Convert OPC to Private Limited: A Detailed Guide

A One Person Company (OPC) can convert into a private limited company under Section 18 of the Companies Act, 2013 with Rule 6 of the Companies (Incorporation) Rules, 2014. Since the Companies (Incorporation) Second Amendment Rules, 2021, the conversion is voluntary at any time, the earlier two-year waiting period and the mandatory conversion based on the Rs. 50 lakh / Rs. 2 crore thresholds have been removed. To convert, the OPC increases its members and directors to at least two, passes a special resolution, and alters its MOA and AOA to remove the OPC-specific clauses, including the nominee. It files Form MGT-14 within 30 days and then Form INC-6, the conversion application, after which a fresh Certificate of Incorporation is issued. The conversion does not affect the company’s existing liabilities.

Why Convert to Private Limited

Converting an OPC to a private company brings benefits:

  • Co-Founders: It allows co-founders and new shareholders to join.
  • Raise Equity: It enables equity fundraising from investors.
  • ESOPs: It allows shares and ESOPs to be issued.
  • No Single Cap: It removes the single-member limitation.
  • Growth: It supports the company’s growth and scale.
  • Credibility: A private limited company carries wider acceptance.

Key Requirements

Converting an OPC requires:

  • Two Members: The members are increased to at least two.
  • Two Directors: The directors are increased to at least two.
  • Voluntary Anytime: Conversion is voluntary at any time since 2021.
  • Altered MOA and AOA: The OPC-specific clauses are removed.
  • Special Resolution: The member passes a special resolution.
  • MGT-14 and INC-6: Both forms are filed for the conversion.

The Conversion Steps

The conversion involves:

  • Add Members: Add at least one shareholder to reach two.
  • Add Directors: Add at least one director to reach two.
  • Special Resolution: Pass the special resolution to convert.
  • Altered MOA and AOA: Remove the nominee and OPC clauses.
  • MGT-14: File within 30 days of the resolution.
  • INC-6: File the application for conversion.

When to Convert

Conversion suits an OPC when:

  • The founder wants to bring in co-founders.
  • The company needs to raise equity.
  • It wants to issue ESOPs to employees.
  • It has outgrown the single-member structure.
  • At any time, as the conversion is now voluntary.

The Process

Converting an OPC to a private company begins with adding at least one member and one director to reach the minimum of two each, with the new director obtaining a DSC and DIN. The sole member passes a special resolution to alter the MOA and AOA, removing the nominee and other OPC-specific clauses, and NOCs are obtained from creditors. The company files Form MGT-14 within 30 days, then Form INC-6, the application for conversion, and files DIR-12 for the new director. On the MCA V3 portal, the Registrar reviews the filings and, if satisfied, issues a fresh Certificate of Incorporation as a private limited company. The conversion does not affect existing liabilities or contracts.

Documents Required

For the Conversion:

  • The special resolution and the altered MOA and AOA.
  • The latest audited balance sheet and profit and loss account, and the NOC from creditors.

For the New Structure:

  • The details and consent of the incoming member and director.
  • The DIN for the new director.

Conversion Process

Converting an OPC follows a clear sequence:

  1. Add at least one member and one director.
  2. Obtain a DSC and DIN for the new director.
  3. Pass the special resolution to convert.
  4. Alter the MOA and AOA to remove the OPC clauses.
  5. File MGT-14 within 30 days, with creditor NOCs.
  6. File INC-6 and DIR-12 with the Registrar.
  7. Receive the fresh certificate of incorporation.

Convert your OPC with Samkhya

Converting your OPC with Samkhya Corporate Services is simple. Just follow these easy steps:

  • Tell us about your OPC: Share its details and your plans.
  • We manage the change: We bring in the member and director and prepare the papers.
  • Fill the form: Complete our online form and provide the documents.

From there, our team handles the new member and director, resolutions, and INC-6 filing.

After the Conversion

Once the OPC is converted:

  • Private Company: The OPC becomes a private limited company.
  • Two-Plus Members: It now has two or more members.
  • Liabilities Carry Over: Existing liabilities and contracts carry over.
  • Nominee Removed: The OPC nominee structure no longer applies.
  • Company Compliance: It moves to private-company compliance.
  • Update Records: Bank, GST, and other records are updated.

Fees, Effect, and Timeline

An OPC-to-private conversion carries the MGT-14 and INC-6 filing fees, based on the company’s authorized capital, with professional charges separate; there is no stamp duty of significance on the conversion itself. Importantly, the conversion is now voluntary at any time, the 2021 amendment removed both the two-year waiting period and the mandatory conversion that the Rs. 50 lakh / Rs. 2 crore thresholds once triggered, so a founder can convert whenever the business is ready for co-founders or outside equity. The conversion does not affect existing liabilities or contracts, which carry over to the private company. The process typically takes 15 to 30 days, and afterwards the company follows the private-company compliance calendar, including audit and the annual ROC filings.

OPC to Private Limited at a Glance

Feature Detail
Governing Law Section 18, Companies Act 2013.
Key Forms MGT-14 and INC-6.
Minimums Two members, two directors.
Since 2021 Voluntary at any time.
Change Remove the nominee clause.
Timeline Around 15 to 30 days.

Frequently Asked Questions

Can an OPC convert into a private limited company?

Yes. An OPC can convert into a private limited company under Section 18 by passing a special resolution and filing Form INC-6, voluntarily at any time.

Is there a waiting period to convert?

No. Since the 2021 amendment, the earlier two-year waiting period has been removed, and an OPC can convert at any time.

What is the minimum after conversion?

A private limited company needs at least two members and two directors, so the OPC adds at least one of each before converting.

What is Form INC-6?

INC-6 is the application filed with the Registrar for the conversion of an OPC into a private (or public) company, or the reverse.

Does conversion affect liabilities?

No. The conversion does not affect the company’s existing liabilities and contracts, which carry over to the private limited company.

How long does the conversion take?

It typically takes around 15 to 30 days, after which a fresh Certificate of Incorporation is issued.