OPC to Private Limited Company Conversion

OPC to Private Limited Company Conversion: What It Means

The Companies (Incorporation) Second Amendment Rules 2021 made two changes to OPC conversion. First, the older size based mandatory conversion triggers (paid up capital crossing fifty lakh or average annual turnover crossing two crore) were removed. OPCs no longer have to convert just because they grow past a revenue threshold. Second, voluntary conversion to a private limited company is permitted at any time after incorporation, not after the earlier two year cooling period. The conversion is filed in form INC 6 with the ROC.

Why Founders Pick This Conversion Path

OPC to private limited conversion is the path founders take when the business is ready for a second shareholder, when external funding is on the horizon, or when ESOP issuance to the team needs the share based structure of a Pvt Ltd. The OPC structure caps ownership at one shareholder; the moment you need to bring in a co founder, an investor or even a sweat equity employee with shares, conversion is the only path. Conversion is voluntary and can be timed to coincide with the trigger event such as a funding close or a strategic hire.

Eligibility Criteria for This Conversion

• The OPC must have completed all annual MCA filings to date
• A second shareholder is identified and ready to subscribe to the converted company
• The new pvt ltd will have at least two directors, with at least one being an Indian resident
• Consent of the existing OPC member is recorded
• No pending winding up or strike off application against the OPC

Documents Required for the Conversion

Step by Step Conversion Process

1. Identify the Second Shareholder and DirectorA second individual is identified to subscribe to the converted pvt ltd. The existing member typically remains as a director and shareholder. The second person becomes a co director and co shareholder.
2. Pass the Resolution of the OPC MemberThe sole member of the OPC passes a written resolution recording the decision to convert, the percentage shareholding of the new shareholder and the appointment of the second director.
3. Alter the MOA and AOAThe Memorandum and Articles are altered to remove OPC specific clauses, including the nominee clause, and to reflect the private limited structure.
4. File INC 6 With the ROCINC 6 is the application for conversion. It is filed within thirty days of the resolution along with the altered MOA and AOA, the special resolution, statement of assets and liabilities and the list of new directors.
5. Fresh Certificate of IncorporationThe ROC issues a fresh Certificate of Incorporation reflecting the private limited status. The name suffix changes from OPC Private Limited to Private Limited. The CIN is updated.
6. Release the Nominee and Update RegistrationsThe INC 3 nominee is released; the new shareholder takes their place in the records. Bank mandates, GST display name, MSME Udyam and other registrations are updated.

Government and Professional Fees for the Conversion

ROC government fee for INC 6 filing, state stamp duty on the altered MOA and AOA where applicable, and our professional fee covering the resolution drafting, MOA and AOA alteration, INC 6 filing and post conversion handover. Request a callback for an itemised view of OPC to private limited conversion fees in your state.

Frequently Asked Questions