Converting a One Person Company (OPC) into a Public Limited Company involves several steps. First, the OPC must increase its minimum number of directors to at least three and its shareholders to at least seven. The company also needs to alter its Memorandum of Association (MoA) and Articles of Association (AoA) to reflect the new structure.
Convert OPC to Public Ltd Company
Converting a One Person Company (OPC) into a Public Limited Company involves several steps. First, the OPC must increase its minimum number of directors to at least three and its shareholders to at least seven. The company also needs to alter its Memorandum of Association (MoA) and Articles of Association (AoA) to reflect the new structure.
After passing a special resolution, the company must file the necessary forms with the Registrar of Companies (RoC), including INC-6 for conversion. Once approved, the OPC will officially become a Public Limited Company, allowing it to raise capital from the public.
In India, to convert a One Person Company (OPC) to a Public Limited Company, the following eligibility criteria must be met:
Minimum Shareholders: The OPC must have at least seven shareholders and at least three directors. This is a requirement for public companies in India.
Paid-Up Capital: The paid-up capital of the company must meet the minimum threshold required for public companies. As per current regulations, this is typically at least ₹5 lakh, though this can vary based on specific rules or changes in legislation.
Compliance with Provisions: The company must comply with all provisions of the Companies Act, 2013, including those related to company management and governance.
Shareholder Agreement: Obtain approval from the existing sole shareholder for the conversion and ensure that a new shareholder agreement is in place.
Registrar Approval: File an application with the Registrar of Companies (RoC) to convert the OPC into a Public Limited Company, along with the required documents and fees.
Converting a One Person Company (OPC) into a Public Limited Company offers several benefits:
1. Access to Capital: Public Limited Companies can raise funds from the public by issuing shares, allowing for greater financial flexibility and growth opportunities.
2. Increased Credibility: A Public Limited Company often has more credibility in the eyes of investors, creditors, and customers, which can lead to easier access to loans and partnerships.
3. Transferability of Shares: Shares of a Public Limited Company are more easily transferable, which can attract potential investors and improve liquidity.
4. Expansion Opportunities: With a larger pool of capital and the ability to attract more shareholders, a Public Limited Company can expand its operations more effectively.
5. Limited Liability: Shareholders enjoy limited liability, meaning their personal assets are protected from the company's debts beyond their shareholdings.
The process of converting a One Person Company (OPC) into a Public Limited Company involves the following steps:
1. Board Meeting: Convene a board meeting to pass a resolution for converting the OPC into a Public Limited Company. Approve changes to the Memorandum of Association (MoA) and Articles of Association (AoA).
2. Increase Number of Directors and Shareholders: Ensure the company has at least three directors and a minimum of seven shareholders, as required for a Public Limited Company.
3. Special Resolution: Hold an Extraordinary General Meeting (EGM) to pass a special resolution approving the conversion. The resolution should be filed with the Registrar of Companies (RoC) using Form MGT-14 within 30 days.
4. Alteration of MoA and AoA: Modify the MoA and AoA to reflect the changes required for a Public Limited Company, including the company's name and structure.
5. Filing of Forms: Submit the necessary documents to the RoC, including:
- Form INC-6: Application for the conversion of OPC into a Public Limited Company.
- Form INC-27: Notice of alteration of the MoA and AoA.
- Form DIR-12: Notice of appointment of directors if any new directors have been appointed.
6. Approval from RoC: The RoC will review the submitted documents. Upon approval, a new Certificate of Incorporation will be issued, signifying the change from an OPC to a Public Limited Company.
7. Post-Conversion Compliance: After conversion, the company must comply with all regulations applicable to Public Limited Companies, such as holding annual general meetings and filing annual returns.
1. Board Resolution: A copy of the board resolution approving the conversion and the alteration of the Memorandum of Association (MoA) and Articles of Association (AoA).
2. Special Resolution: The resolution passed at the Extraordinary General Meeting (EGM) approving the conversion, along with the altered MoA and AoA.
3. Form MGT-14: Filed with the Registrar of Companies (RoC) within 30 days of passing the special resolution, including the details of the resolution.
4. Form INC-6: Application for the conversion of the OPC into a Public Limited Company, submitted to the RoC.
5. Form INC-27: Notice of alteration of the MoA and AoA, detailing the changes made to the company’s structure.
6. Form DIR-12: Notice of appointment or changes in directors, if any new directors are appointed or existing ones are changed.
7. List of Directors and Shareholders: A detailed list of the current directors and shareholders of the company, with their personal and professional details.
8. Altered MoA and Ao: Copies of the altered Memorandum and Articles of Association reflecting the new status of the company as a Public Limited Company.
9. Consent Letters: Consent letters from all the directors and shareholders agreeing to the conversion and the roles assigned to them in the newly converted Public Limited Company.
10. Certificate of Incorporation of OPC: The original Certificate of Incorporation of the OPC, which will be replaced after conversion.
11. Audited Financial Statements: Copies of the company’s most recent audited financial statements.
12. PAN and TAN of the Company: Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) of the OPC.
13. Declaration by Directors: A declaration by the directors affirming that all compliances related to the conversion have been met.
SS AUDITORS AND TAXES CO can provide comprehensive support to companies looking to convert their One Person Company (OPC) into a Public Limited Company through the following services:
1. Advisory Services: Offering expert advice on the legal, financial, and regulatory implications of the conversion, ensuring that the process aligns with the company’s growth objectives.
2. Documentation Assistance: Assisting in the preparation and filing of all necessary documents, such as board resolutions, special resolutions, altered Memorandum of Association (MoA) and Articles of Association (AoA), and various forms like INC-6, INC-27, and DIR-12.
3. Compliance Management: Ensuring that the company meets all regulatory requirements during and after the conversion, including adherence to the Companies Act, 2013, and the filing of necessary forms with the Registrar of Companies (RoC).
4. Director and Shareholder Management: Guiding the company in increasing the number of directors and shareholders as required for a Public Limited Company, including drafting consent letters and managing appointments.
5. Alteration of MoA and AoA: Providing legal assistance in altering the MoA and AoA to reflect the company’s new structure, including the drafting and vetting of documents to ensure they are compliant with legal standards.
6. Filing and Approvals: Handling the filing of all forms and documents with the RoC, tracking the approval process, and addressing any queries or issues raised by the authorities.
7. Post-Conversion Compliance: Offering ongoing support to ensure the company complies with all post-conversion requirements, such as holding annual general meetings, filing annual returns, and maintaining statutory records.
8. Tax Advisory and Planning: Providing tax planning advice to optimise the company’s tax position following the conversion, ensuring that the company takes full advantage of any tax benefits or incentives available to Public Limited Companies.
9. Financial Audits and Reports: Conducting financial audits and preparing detailed reports to support the conversion process, ensuring that the company’s financials are in order and meet the requirements of a Public Limited Company.
10. Training and Support: Offering training sessions for the company’s management and staff on the new compliance obligations and corporate governance practices that come with being a Public Limited Company.
With these services, SS AUDITORS AND TAXES CO can streamline the conversion process, ensuring a smooth transition from OPC to Public Limited Company while minimising risks and maximising benefits.
At least three directors are required to convert an OPC into a Public Limited Company.
Yes, an OPC can be converted directly into a Public Limited Company by following the prescribed process and filing the necessary forms with the Registrar of Companies (RoC).
Key documents include the altered Memorandum of Association (MoA) and Articles of Association (AoA), board and special resolutions, Form INC-6, and a list of directors and shareholders
The main benefits include access to public capital, increased credibility, easier share transferability, and better expansion opportunities.
The process can take a few weeks to a couple of months, depending on the completeness of the documentation and the RoC’s processing time.
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