The main agenda in the wake of the following article is to guide you through as to how to convert Private Company to One Person Company. But firstly, let us first understand the difference between the two.
A Private Limited Company is a company which can have a minimum of 2 members and can go up to 200 members which have limited liability of its members. It must have a minimum of 2 directors and a maximum of 15 directors. A minimum of 2 shareholders required for its legal registration.
In case of One Person Company, it allows a single individual to own and manage the business. One Person Company is, therefore, a feasible option for those looking to start an unregistered Proprietorship.
Q. When is a Private Limited Company eligible to convert into One Person Company?
A. A private company is registered under section 8 of the Act having paid up share capital of fifty lakhs rupees or less or average annual turnover during the relevant period is Rs. 2 Crore or less may convert itself into One Person Company.
Q. What is the procedure to convert Private Company into One Person Company?
A. The company must pass a special resolution at the general meeting:
- Before passing such resolution, the company shall obtain No objection in writing from members and Creditors.
- The one person company shall file a copy of the special resolution with the Registrar of Companies within thirty days from the date of passing such resolution in Form No. MGT.14.
- The company shall file an application in Form No.INC.6 for its conversion into One Person Company along with fees as provided in the Companies (Registration offices and fees) Rules, 2014, by attaching the following documents, namely:-
(i) The directors of the company shall give a declaration by way of affidavit duly sworn in confirming that all members and creditors of the company have given their consent for conversion, the paid up share capital company is Rs. 50 Lakhs or less or average annual turnover is less than Rs. 2 Crore, as the case may be;
(ii) The list of members and list of creditors;
(iii) The latest Audited Balance Sheet and the Profit and Loss Account; and
(iv) The copy of No Objection letter of secured creditors.
- On being satisfied and complied with requirements stated herein the Registrar shall issue the Certificate.
Q. What are the documents required for conversion of Private Limited to One Person Company?
A. It is binding to attach the documents mentioned under for conversion of Private Limited to One Person Company:
- Altered Memorandum of association
- Altered Articles of association
- Copy of the duly audited and certified latest financial statement.
- Copy of board resolution authorizing giving notice
- It is mandatory to attach a certificate from Chartered Accountant if the conversion is, because of exceeding average annual turnover Affidavit (as above already specified)
- Certified true copy of minutes, list of creditors and list of members (as above already specified).
- Copy of NOC of every creditor (as above already specified).
- Consent of the nominee in Form No. INC-3 along with all enclosures
- Copy of PAN card of the nominee and member.
- Proof of identity of the nominee and member.
- Residential proof of the nominee and member
Though we tried to provide best of our knowledge in the above article, in case of any further queries regarding any legal advice or registration and compliance of any company you can contact our experts at firstname.lastname@example.org.
Note – Please note that the above article is for education purpose only. This is based on our interpretation of laws which may differ person to person. Readers are expected to verify the facts and laws