Company to an OPC
Prior to 2014, when the concept of One Person company was not there, many entrepreneurs had incorporated a Private Company, since they wanted to have a corporate structure with all the benefits accruing to a Company.
Even now, many entrepreneurs incorporate a Private Company and then realise that they are flying solo, i.e. they do not need to bring in Equity Capital.
Thus, in both the above scenarios, the Private Company can be converted into a One Person company (OPC) with all the benefits of the Corporate structure but with reduced compliances.
Applicable provisions:
Section 18 of the Companies Act, 2013 read with Rule 7 of the Companies (Incorporation) Rules, 2014, states the process for conversion of a Private Company into an OPC
Certain Companies not eligible for conversion :
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A Company registered u/s 8 of the Companies Act, 2013 (earlier u/s 25 of the Companies Act, 1956)
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A public Limited Company (it has to first convert into a private limited company and thereafter into an OPC)
Changes to be made after Conversion:
Under Companies Act, 2013
a. Print the new Altered Memorandum and Articles of Association with new Certificate of Incorporation.
b. Alter the name plate affixed on the outside of every office or place in which its business is carried on and also include, along with its name, the former name or names so changed during the last two years. (Eg: ABC Limited (formerly ABC Private Limited) or XYZ (OPC) Private Limited (formerly XYZ Private Limited))
c. In case of One Person Company, the words "One Person Company" shall be mentioned in brackets below the name of such company, wherever its name is printed, affixed or engraved.
d. Alter its Common seal, if any.
e. Alter it letterhead, business letters, billheads, letter papers and in all its notices and other official publications.
f. Alter the hundies, promissory notes, bills of exchange and such other documents and also include, along with its name, the former name or names so changed during the last two years. (Eg: ABC Limited (formerly ABC Private Limited) or XYZ (OPC) Private Limited (formerly XYZ Private Limited))
g. Arrange new rubber stamps with new name
File Necessary Amendment Application with the following Organisations/Agencies:
a. Update Entity DSC
b. Bank(s) where the entity maintains its Account(s)
c. Update PAN/TAN/GST
d. Basic Utility Service Providers (eg: Electricity, Water, Internet, Telephone etc.)
e. Inform all the concerned parties where company has made investment(s), taken loan(s), given guarantee(s)
f. Intimate Insurance companies,
g. Update agreements etc.
h. Intimate and update where the entity applies for tenders
i. Goods and Services Act
j. Shops & Establishment Act
k. Private Security Agency Act
l. EPFO
m. ESIC
n. MSME, FSSAI, DIPP, EXIM, FEMA registration, if any
o. Trade License, Professional Tax
p. Factories Act and other Labour Laws
q. Industry Specific Laws