Conversion of One Person Company (OPC) Into Private Limited or Public Limited Company


One Person Company (OPC) means a company, which has only one person as a member. OPC can be converted into Private / public limited Company either by voluntarily or compulsory.

Compulsory Conversion:

Under below mentioned scenario, it is compulsory to convert OPC into private or public limited company;

1. Its paid up Share Capital of OPC increased beyond fifty lakhs rupees; or

2. its average annual turnover during the relevant period exceeds two crore rupees

Here, “relevant period” means the period of immediately preceding three consecutive financial years;

In such scenario, within six months from the day on which paid up share capital of OPC exceed fifty lakhs rupees or six months from the last day of the relevant period during which its average annual turnover exceeds two crore rupees as the case may be, OPC shall be converted itself into private company with minimum of two members and two directors or a public company with at least of seven members and three directors in accordance with the provisions of section 18 of the Act.

Voluntary conversion:

If any One Person Company wants to convert itself into private/public company then also it can voluntarily apply through Form INC-6 after two years of its incorporation

Procedure of conversion:

1) To pass resolution of conversion and entered the same in the minutes book required to be maintained under section 118 of the Companies Act, 2013, as prescribed under section 122 of the Companies Act, 2013.

2) File form MGT -14 within 30 days from the date of passing of Resolution

3) If there is compulsory conversion of OPC into Private/ Public Company, then file form INC-5.

4) Make Application through filling of e-form INC – 6. In Compulsory Conversion, Form INC-6 required to file within 6 months from the effective date on which the above threshold limit was exceeded.

Author of this article is CS Zalak Dodiya and can be contacted at e-mail id: [email protected] and Contact No.: 09714087897

Author Bio

Qualification: CS
Company: N/A
Location: Ahmedabad, Gujarat, IN
Member Since: 28 Jan 2021 | Total Posts: 1

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February 2021