Types of Conversion

• Voluntary Conversion: An OPC can voluntarily convert into a private limited company after two years from the date of incorporation.
  
• Mandatory Conversion: If the paid-up share capital exceeds ₹50 lakh or the annual turnover exceeds ₹2 crore, conversion becomes compulsory.
  
• The conversion must be filed with the Registrar of Companies (RoC) using prescribed forms.
  
• The type of conversion determines the timelines and forms to be submitted.
  
• Voluntary conversion is not allowed within the first two years unless threshold limits are breached.
  

Eligibility and Preconditions

• The OPC must have complied with all filing and financial reporting requirements.
  
• In case of voluntary conversion, the two-year condition must be fulfilled unless it is a threshold-based conversion.
  
• The company must appoint at least two members and two directors, as required for a private limited company.
  
• An alteration of the Memorandum and Articles of Association is required to reflect the new structure.
  
• Written consent from the existing member and nominee is necessary to initiate conversion.
  

Process and Documentation

• The OPC must file Form INC-6 with the RoC along with necessary attachments.
  
• Key documents include Board Resolution, altered MoA and AoA, list of proposed members and directors, and proof of compliance.
  
• All existing liabilities and contracts of the OPC transfer to the new private company.
  
• The RoC reviews and verifies the application before issuing a Certificate of Incorporation for the new entity.
  
• The company must update all statutory records to reflect the new name and structure.
  

Post-Conversion Requirements

• A new Certificate of Incorporation is issued under the new company name.
  
• The company must inform all stakeholders, banks, and authorities about the conversion.
  
• PAN, TAN, and other registrations may need to be updated or reapplied under the new structure.
  
• The private company must comply with additional regulations such as conducting board meetings, appointing an auditor, and maintaining statutory registers.
  
• The company may now include multiple shareholders and raise capital through equity.
  

Benefits of Conversion

• Enables the business to expand ownership and attract investments.
  
• Provides greater operational flexibility and access to funding.
  
• Removes the one-member limitation and enhances corporate governance.
  
• Supports scaling of business activities beyond the scope of OPC.
  
• Facilitates strategic partnerships and professional management through shared ownership.