Procedure For Conversion of Private Company Into OPC

Procedure For Conversion of Private Company Into OPC

November 27, 2016
     


Conversion of companies is defined in Section 18 read with Rule 7 of the Companies (Incorporation) Rules, 2015. According to Rule 7A private company other than a company registered under Section 8 of the Companies Act 2013, who has a share capital of 50 lakhs rupees or those having an average annual turnover is 2 Crore Rupees during the relevant period, may convert their private company into a one-person company. 

Procedure For Conversion of Private Company Into OPC

1.Issue notice along with agenda of board meeting in accordance with Section 173(3) read with Secretarial Standard 1by giving not less than seven days notice in writing to every director at his address registered with the company and such notice shall be sent by hand delivery or by post (either registered or speed) or by electronic means or by courier, by facsimile or E-mail.
2. Convene board meeting and pass board resolution for the following agenda’s:
(a) To Get in-principal approval of Directors for Conversion of Private Company into One Person Company (OPC);
(b) Fix date, time and place for holding Extra-ordinary General meeting (EGM) to get the approval of shareholders, by way of Special Resolution, for Conversion
(c) To approve the notice of EGM along with Agenda and Explanatory Statement to be annexed to the notice of General Meeting as per section 102(1) of the Companies Act, 2013;
(d)To authorize the Director or Company Secretary to issue Notice of the Extra-ordinary General meeting (EGM) as approved by the board. 
3. Provisions of Section 101 of the Companies Act 2013 read with Secretarial Standard 2 provides for issue of notice of EGM in  writing to below mentions by giving not less than clear 21 days either in writing or through electronic mode before the actual date of the EGM
(a) every Member
(b) the Directors
(c) Auditors of the company
(d) Debenture Trustees, if any
(e) Other Specified persons, if applicable
Provided that a general meeting may be called after giving a shorter notice if consent is given in writing or by electronic mode by not less than ninety-five percent of the members entitled to vote at such meeting.
4. Pass Special Resolution as per section 114(2) to get shareholders approval for Conversion of Private Company into One Person Company (OPC). Provided that before passing Special resolution, the company shall obtain No Objection Certificate in writing from existing members and creditors. 
5. Ensure that Minutes of a General Meeting shall be prepared, signed and dated by the Chairman of the Meeting and or in the event of death or inability of that Chairman, by any Director who was present in the Meeting and duly authorized by the Board for the purpose, within thirty days of the General Meeting.
    Note:  Ensure that the minutes of the proceedings of the meeting is to be entered in the minutes book within thirty days of the General Meeting. 
6. Copy of the abovementioned special resolution is required to be filed with concerned ROC through filing of form MGT.14along with following    attachments within 30 days of passing Special Resolution in the EGM:
(a) Notice of EGM along with a copy of the explanatory statement under section 102;
(b) Certified True copy of Special Resolution;
(c) Altered memorandum of association;
(d) Altered Articles of association
(e) Certified True copy of Board Resolution may be attached as an optional attachment.
7. Further an Application for conversion of a private company into an OPC is required to be filed in E-Form INC.6 to the ROC concerned, with all     the necessary annexure and with prescribed fee as provided in the Companies( Registration offices and fees) Rules,2014:
(a) The list of members and list of creditors.
(b)The latest Audited Balance Sheet and the Profit and Loss Account; and
(c) The copy of No Objection letter of secured creditors.
(d) NOC of Members and Creditors.
(e) The directors of the company shall give a declaration by way of an affidavit duly sworn in confirming that all members and creditors of the company have given their consent for conversion, the paid-up share capital company is fifty lakhs rupees or less or average annual turnover is less than two crores rupees, as the case may be Other information if any can be provided as an optional attachment.
8.On being satisfied that Company has complied with the prescribed abovementioned requirements the Registrar shall issue the Certificate to the effect of Conversion of Private Company into One Person Company (OPC). 
Related Post :
Draft Board Resolution for Conversion of Private Limited Company into OPC
Procedure For Conversion of OPC Into Private or Public Company
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