How can a one-person company be converted into a public?

Business Strategist

How can a one-person company be converted into a public or private company as per the Indian Companies Act 2013?

 
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Advocate

Add directors with you then file application before ROC

 
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If the paid-up share capital of a One Person Company exceeds Rupees Fifty Lakh or its average annual turnover of previous three consecutive fiscal years exceeds rupees Two Crore, then the company has to obligatorily convert itself into private or public company. The One Person Company shall inform the RoC in form INC-5, if the either of the threshold limits is exceeded. The maximum time provided for the conversion after the OPC meets the above-stated criteria is of six months. A One Person Company has the option to transform itself into either a public limited company or a private limited company. 
The MOA and AOA should be amended:
The One Person Company should be suffixed with Private limited or Limited company at the end of its name.
In the instance of Private Limited Company, there have to be changes required in the clause of capital (when increased).
The clause of objectives of the MOA should also be amended if there is a requirement of some additional objectives in the clause.
The clause corresponding to subscribers need to be altered as well as there is a requirement of insertions of additional members in the MOA.
The RoC has to be informed through the form no. INC 5 within 30 days that the current One Person Company is getting converted into either a Public or Private company as the amount of Capital has triggered the requirement of conversion. After such notification, the RoC will issue a fresh notice of incorporation.
It has to be mentioned that under Voluntary Conversion, the standard is that the OPC is not allowed to transform itself into a public company or a private limited company until the end of two years from the date of incorporation as a One Person Company. 
 

 
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ha21@rediffmail.com Mumbai : 9820174108

1. OPC cannot be converted into a Public Ltd. Co.

2. Coordinate with a local CS, for your requirements.

Keep Smiling .... Hemant Agarwal 
VISIT:  www.chshelpforum.com
 

 
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Online Legal Service

A one person company (OPC) can be lawfully converted into a public or private limited company, voluntarily or mandatorily.

COMPULSORY CONVERSION

An OPC shall be compulsorily required to convert itself into a public or private limited company, if:

  1. its total paid up capital exceeds INR 50 Lakh; or
  2. its annual turnover exceeds INR 2 Crore

If the OPC attracts the any of the threshold limit, such OPC shall alter its Memorandum and Articles by passing a resolution in General Meeting according to Companies Act, 2013.

The OPC is required to give notice to the registrar in Form no. INC-5 informing that it has ceased to be an OPC and it is required to convert itself into a public or private company within 60 days from the date of applicability of above conditions.

VOLUNTARY CONVERSION

An OPC cannot be converted into a private or public company, up to two years from its incorporation.

The procedure of voluntary conversion of an OPC as prescribed by relevant law is prescribed below:

  1. At the time of conversion, the total paid up capital should be more than or equal to INR 50 Lakh, and its average annual turnover should be more than INR 2 Crore.
  2. An OPC can get itself converted into a Private or Public company after increasing the minimum number of members and directors to two or minimum of seven members and two or three directors as the case may be.
  3. The OPC is required to pass a resolution in general meeting and copy of such resolution must be sent to the concerned ROC within 30 days of passing it.
  4. The company shall file an application in Form INC-6 for its conversion by payment of prescribed fee and documents as mentioned below:
  • the directors of the company shall give a declaration by way of affidavit
  • List of members
  • List of creditor and a copy of No Objection letter from creditors, if any
  • The latest audited balance sheet and the profit and loss account
 
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