Introduction
It is wonderful to start as a One Person Company (OPC) for solo founders seeking limited liability and minimal structure. But as you expand your business, OPC limitations – such as one shareholder or limits on capital – can constrain you.
If you’re wondering how to convert an OPC into a Private Limited Company in India, this guide covers everything: eligibility, procedure, documents, cost, and timelines – straight from MCA and government guidelines.
What is an OPC and Why Convert It?
An OPC (One Person Company) allows a single entrepreneur to operate with limited liability under the Companies Act, 2013.
But the law gives some limits – such as limited capital and cannot increase the number of shareholders.
That's why most founders transform their OPC to a Private Limited Company to raise more funds, opportunities for growth, and trustworthiness.
Key Reasons to Convert OPC to Private Limited Company
- In order to raise investment from several shareholders.
- To increase operations and add more directors.
- In order to meet growth-based conversion requirements under MCA rules.
- For enhancing business credibility with investors and banks.
Legal Provisions Under Companies Act, 2013
Under Rule 6 of the Companies (Incorporation) Rules, 2014, an OPC shall be converted into a Private Limited Company if:
- The paid-up value is more than ₹50 lakhs, or
- The average annual turnover is more than ₹2 crores in any financial year.
You can even voluntarily convert prior to reaching these levels upon completion of two years from the date of incorporation.
Step-by-Step Process to Convert OPC into Private Limited Company
|
Step |
Process |
Details |
|---|---|---|
|
1 |
Conduct Board Meeting |
Pass a resolution to convert OPC into Private Limited and sanction change of MOA & AOA. |
|
2 |
File Application with ROC |
Apply on Form INC-6 with documents as may be required. |
|
3 |
Change MOA and AOA |
Make changes in the Memorandum and Articles of Association to incorporate Private Limited form. |
|
4 |
Increase Number of Directors & Members |
Increase minimum 2 directors and 2 shareholders (as per Section 3(1)(b)). |
|
5 |
File E-forms with ROC |
File documents such as INC-6, MGT-14, and supporting documents. |
|
6 |
Issue Fresh Certificate of Incorporation |
ROC will issue a fresh certificate establishing conversion into a Private Limited Company. |
Documents Required
- Copy of latest OPC financial statements
- Board resolution and special resolution for conversion
- Altered MOA and AOA
- List of members and directors post-conversion
- Consent letters and declarations of new directors/shareholders
Timeline & Cost of Conversion
|
Activity |
Approx. Time |
Estimated Cost |
|
Preparing documents |
2–3 days |
₹1,000–₹2,000 |
|
ROC filings & government fees |
7–10 working days |
₹3,000–₹6,000 |
|
Professional assistance |
Varies |
₹5,000–₹10,000 |
(Costs are state-dependent, authorized capital, and professional fees.)
Principal Compliance After Conversion
Once the new Certificate of Incorporation is issued, the company has to:
- PAN, GST, bank accounts, and statutory registrations update.
- Modify business licenses and agreements to reflect new company status.
- File necessary annual returns as a Private Limited Company.
Conclusion
Converting your OPC to a Private Limited Company provides avenues for growth, funding, and flexibility of compliance. Proper documentation and guidance can make the process easy and quick.
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