Home Company Law - Editorial Process of Conversion of OPC Into Private/ Public Company

Process of Conversion of OPC Into Private/ Public Company

by CS Divesh Goyal
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Summary:

As proposed in Budget Speech in respect of amendment in provision of One Person Company. MCA has introduced “Companies (Incorporation), Second Amendment Rules, 2021 on 1st February, 2021.

Most Important: Amendment in Process of Conversion of One Person Company to Private/ Public Company

Date of Effectiveness of these rules:

[1]These new process / rules came into effect on 1 April 2021.

Process of Conversion of OPC to Other Company:

STEP – 1: Holding of Board Meeting

OPC Shall hold Meeting of Board of Directors in case there are more than 1 director. In case opc having only one director then the date of noting of resolution in minute book shall be considered as date of Board Meeting. Following resolutions shall be passed in BM:

  • Conversion of OPC into other type of Company
  • Alteration in MOA & AOA

STEP – 2: Alteration on MOA & AOA

OPC Shall alter its Moa & AOA by passing a shareholder resolution to give effect to the conversion.

Que: How to pass shareholder resolution in OPC?

As per Section 122(3), instead of holding of EGM or AGM, it shall be sufficient if, in case of One Person Company, the resolution is communicated by the member to the company and entered in the minutes-book required to be maintained under and signed and dated by the member and such date shall be deemed to be the date of the meeting for all the purposes under this Act.

Steps of passing of Resolution:

  • Noting in Minutes Book
  • Sign and date the Minutes
  • Extract of Minutes as CTC

STEP – 3: Increase in Number of Member & Directors:

OPC Shall increase number of members and directors as per the requirements of the Act for such class of Company.

Increase in No. of Director: OPC shall pass board as well as general meeting resolution for appointment of Director. After passing of resolution OPC shall file DIT-12 with ROC.

Increase in No. of Members: OPC shall increase no. of members by allotment of new shares or transfer of existing shares.

STEP – 4: Filing of INC-6:

OPC shall file e-form INC-6 along with following documents;

  • Altered AOA and MOA
  • Copy of Resolution
  • List of proposed members and its director along with consent
  • List of Creditors; and
  • The latest audited balance sheet and profit and loss account. 

STEP – 5: Issue of Certificate by ROC:

Once ROC satisfied that requirement of this rule has been complied with, the ROC shall approve the form and issue the certificate.

Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).

Disclaimer: The entire contents of this document have been prepared based on relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness, and reliability of the information provided, I assume no responsibility, therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a piece of professional advice and is subject to change without notice. I assume no responsibility for the consequences of the use of such information.

IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION

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