The One Person Company (OPC) is a newly incorporated type of company and was introduced in the Companies Act, 2013 to support entrepreneurs who on their own are capable of starting a venture by allowing them to create a single person economic entity. There can be only one, natural person resident of India who can be the member of OPC. However, there is no restriction on maximum number of Directors. But sometimes, there might be a situation when the single member intends to expand the broad base of the Company for its better growth and future prospects. Therefore in this article we shall study about the methods, procedure, and statutory costing w.r.t. conversion of OPC into Private/Public Company.
I. PROCEDURE OF CONVERSION:
| S. No. | Particulars |
| 1. | Give notice to Directors along with the agenda and notes on agenda to convene the Board Meeting at least seven days before the date of the meeting in compliance with the Secretarial Standards I to consider the conversion. |
| 2. | Convene Board Meeting for the following:
|
| 3. | The resolution shall be communicated to the member and entered in the minutes book and signed and dated by the member and such date shall be deemed to be the date of the meeting for all the purposes in accordance with Section 122 of the Act. |
| 4. | File Form MGT-14 within 30 days of passing the resolution.
Attachments:
|
| 6. | File Form INC-5 within sixty days of passing the resolution informing the Registrar. Note that this form is required to be filed only in case of compulsory conversion.
Attachments:
|
| 7. | File Form INC-6 within:
√ 6 months of mandatory conversion √ 30 days of voluntarily conversion Attachments:
|
II. STATUTORY COSTING (in case the capital is Rs. 50 Lakhs)
| S. No. | Particulars | Amount (in Rs.) |
| 1. | MGT-14 | 500 |
| 2. | INC-5 | 500 |
| 3. | INC-6 | 500 |
| Total | 1500* | |
*Statutory costing varies in accordance with the authorized capital of the Company.
III. IMPORTANT POINTS:
1. The One Person Company can convert itself into private or public Company as it may seem appropriate after compliance to the minimum number of Directors and member requirement.
2. e-Form INC-5 shall be filed only once e-Form MGT-14 is approved.
3. In case of mandaotry conversion, Form INC-6 shall be filed within six months of passing the resolution whereas in case of voluntary conversion, it has to be filed within 30 days of passing the resolution.
IV. FREQUENTLY ASKED QUESTIONS
1. How can EOGM be convened in case of One Person Company to pass special resolution when there is only one member?
Reply: In case of One Person Company, there is no convene an extra ordinary general meeting like private and public Companies. As per the provisions of Section 122 of the Companies Act, 2013, in case of OPC, it shall be sufficient if the resolution is communicated by the member to the Company and entered in the minutes-book and signed and dated by the member and such date shall be deemed to be the date of the meeting for all the purposes.
2. Can Directors be appointed before to meet the minimum compliance requirement of private/public Company before conversion?
Reply: Yes, the Directors shall be appointed before as the e-Form INC-6 asks for the same.
3. Can Members be appointed before to meet the minimum compliance requirement of private/public Company before conversion?
Reply: No, the One Person Company can have only one member and therefore the Company cannot increase the members before conversion. However, after conversion, it shall increase the number of members to meet the minimum compliance requirement.
{The author is a Company Secretary in Practice and can be reached at (M) 9999952595 and (E) cskajalgoyal@gmail.com}
Author Bio
what is the full form of CTC in this article?
Whether Application for Reservation of Name to be made for conversion of OPC in to Private Limited? And how to make an application?
Madam please provide resolutions for the same
I have one doubt, That procedure for resignation of Directors and transfer of share is to be done before filing of MGT-14 or after filing of MGTt-14.
very helpful…
Good One
CS IP Manish Buchasia
buchasia.com