Introduction

A One Person Company (OPC) is ideal for solo entrepreneurs but has limitations, such as restrictions on fundraising and business expansion. When an OPC grows beyond certain thresholds or requires external investments, it must be converted into a Private Limited Company (Pvt. Ltd.).

This guide outlines the legal process, compliance requirements, and benefits of converting an OPC into a Private Limited Company, ensuring a smooth transition.

1. When Should You Convert an OPC into a Private Limited Company?

There are two scenarios when an OPC must be converted:

✅ Mandatory Conversion – If the OPC meets any of the following criteria:

• Turnover exceeds ₹2 crores in the previous three financial years.
• Paid-up capital exceeds ₹50 lakh.

✅ Voluntary Conversion – If the owner wishes to expand the business and add shareholders or directors, they can voluntarily convert the OPC anytime after two years from incorporation.

2. Step-by-Step Process for Conversion

Step 1: Board Resolution & Approval

• Conduct a board meeting and pass a resolution to convert the OPC into a Pvt. Ltd. company.
• Get the Director’s Digital Signature Certificate (DSC) and Director Identification Number (DIN) if not already obtained.

Step 2: Alter Memorandum & Articles of Association (MOA & AOA)

• Modify the MOA & AOA to align with the rules of a Private Limited Company.
• Include new clauses for multiple shareholders, share capital structure, and director provisions.

Step 3: Apply for Name Approval

• Apply for Company Name Approval through RUN (Reserve Unique Name) on the MCA Portal.
• Ensure that the new name ends with “Private Limited”.

Step 4: File Conversion Application with MCA

• File Form INC-6 with the following documents:
  ✅ Copy of the Board Resolution
  ✅ Altered MOA & AOA
  ✅ Latest Financial Statements
  ✅ Declaration from Directors & Shareholders

Step 5: Approval & Issuance of Incorporation Certificate

• Upon verification, the Registrar of Companies (ROC) will issue a new Certificate of Incorporation.
• The business now officially operates as a Private Limited Company.

3. Compliance After Conversion

After conversion, the company must:

✅ File ROC Annual Returns – Forms MGT-7 & AOC-4.
✅ Update PAN, TAN, and GST Registration with the new name.
✅ Conduct Board Meetings & Maintain Minutes of Meetings (MoM).
✅ Appoint Auditors and File Income Tax Returns as a Pvt. Ltd. Company.

Non-compliance can result in penalties and affect the company’s operations.

4. Benefits of Conversion

• Ability to Raise Funds – Pvt. Ltd. companies can issue equity shares to investors.
• Limited Liability Protection – Shareholders’ liability remains limited to their investments.
• More Credibility & Market Growth – Pvt. Ltd. status boosts business reputation and attracts customers.

Conclusion: Let ASK ASSOCIATES Handle Your OPC to Pvt. Ltd. Conversion!

Converting an OPC into a Private Limited Company involves legal formalities and compliance filings. ASK ASSOCIATES simplifies the process with:

✔ Expert Guidance on MOA & AOA Alteration
✔ Hassle-Free ROC Filing & Documentation
✔ Tax & Compliance Support After Conversion

Start your business expansion today—convert your OPC with ease! 🚀