A One Person company can be easily managed with less compliance as only a single member is responsible for conducting the business of the company. OPC has more benefits than a private company hence any private company dealing with all sorts of businesses is applicable to convert itself to an OPC with the rules and provisions given in Section 18 of the Indian Companies Act of 2013, and the Companies (Incorporation) Rules of 2014 [CR-2014]
Legal Provisions related to Conversion of Private Company into One Person Company are given in Section 18 the Companies Act, 2013 read with Rule 7 of Companies (Incorporation) Rules, 2014.
Step - 1: BOARD MEETING
A notice is issued per the provisions of section 173(3) of Companies Act 2013 to summon a board meeting to discuss the conversion of the company. In the meeting principal approval of all directors is taken into consideration and date, time and venue are decided to hold an extraordinary general meeting (EGM) to take approval of all the shareholders by special resolution by Rule 7 of Companies (incorporation) Rules, 2014.
Step - 2: ISSUE OF NO OBJECTION CERTIFICATE
The Company shall obtain a NOC (NO OBJECTION CERTIFICATE) in writing from existing members when passing a special resolution in the general meeting. A copy of the consent of the creditors is placed before the EGM.
Step - 3: NOTICE OF EXTRAORDINARY GENERAL MEETING
In accordance with the provision of section 101 of Companies Act 2013 a notice of EGM is issued to all the directors, members and auditors of the company. The date of issue of notice must be in writing and to be issued 21 days before the date of EGM.
Step - 4: PROSECUTION OF EGM
EGM must be conducted on a given date and time as per the notice. All the members including shareholder, directors and auditors must be present. Check if the auditor is present if not, check the Leave of Absence is granted or not under Sec 146. In the meeting, a special resolution is passed for the approval of altered MOA (memorandum of association) and AOA (article of association) and conversion of the company
Step - 5: ROC FORM FILING
E-Form required to be filed for Conversion of Private Limited Company into OPC:
Form MGT-14 for Alteration of MOA and AOA
As per Sec. 117(3) the special resolution passed must be filed with ROC in form no. MGT-14 along with prescribed attachments and a govt. fees of INR 300 within 30 days of passing the special resolution.
The attachments include:
Form INC-6 for Application for Conversion
Form INC-6 needs to be filed to ROC for conversion of a public company to One Person Company with required fees under Companies (Registration offices and fees) Rules, 2014 and necessary annexure which includes
Step - 6: CERTIFICATE OF CONVERSION
After filing all the documents the ROC (registrar of companies) check the Eforms and documents submitted for the conversion. Following the fulfilments and satisfaction of ROC it issues a certificate of conversion stating effective conversion of the private company to One Person Company.
Few documents need to be altered or issued fresh post-conversion of the company
In the case of IFSC company, the additional fee shall be applicable only after the expiry of 60 days of the event date.
However, in case of form filing after 60 days, the logic delay days’ calculation for computing the additional fee shall remain same in case of other than IFSC company i.e. due to date shall be considered as (Event Date = 29) even for an IFSC company.