Conversion of a One Person Company (OPC) into a Private Limited Company in Chandigarh, Punjab

A One Person Company (OPC) can be converted in to a Private Limited Company in Chandigarh, Punjab as per Section 18 of the Companies Act, 2013. There are two ways through which a One Person Company (OPC) in Chandigarh, Punjab can be converted into a Private Limited Company i.e. voluntarily conversion or mandatorily conversion. In any of these conversions, the Memorandum of Association and Article of Association of the One Person Company (OPC) needs to be changed as per the section 18 and section 122 of the Companies Act, 2013 in Chandigarh, Punjab.

As per Section 18 Companies Act, 2013 following conditions need to me made:

• • Get written consent from all the creditors
  • Pass the resolution of conversion

• Minimum paid-up capital requirement of Rs 1,00,000 to be met
• Minimum number of 2 directors and 2 members need to be met

Form INC-6 is to be filed to the Ministry of Corporate Affairs for conversion of One Person Company (OPC) into a Private Limited Company in Chandigarh, Punjab.

Conversion of a One Person Company (OPC) into a Private Limited Company in Chandigarh, Punjab

Chandigarh is always benchmarked as one of the best-planned cities in India. With very good social infrastructure along with large green spaces attracts many to make it their home city or working destination. Chandigarh, capital of two states Punjab and Haryana, is considered among the best cities of the world. Chandigarh international airport connects it well with other parts of country. Chandigarh alone house more than 56000 MSME units majorly in the field of manufacturing tractor components. Other industries based out Chandigarh includes IT and ITeS, electronics, pharmaceuticals, plastics, machine tools. To serve the requirements of IT industry, a SEZ namely Rajiv Gandhi Chandigarh Technology Park (RGCTP)has been developed. Also, plans are there to setup terminal market for fruits and vegetables to support crop diversification program in Punjab and Haryana.

Punjab is among the most prosperous state of India with excellent road and rail network. Punjab has five airports with terminal for passengers, five container freight stations (CFSs) and four inland container depots (ICDs). Punjab is bordering state with Jammu and Kashmir, Haryana and Rajasthan surrounding it on other sides. With total of 4.2 million hectares of cultivable area, it constitutes more than 3% of net area sown. However with highly fertile land, it produces more than 18% of wheat, of rice, 20% of honey, 10% of milk, 48% of mushroom along with 5% of cotton of the country.

With very production of wheat, it is just next to Canada and Australia in terms of marketable surplus. In Rice production it is next only to Thailand. Major industries in Punjab include food processing, tractors and auto components, agro-based parts, bicycle and bicycle parts, sports goods, light engineering goods, metal and alloys, chemical products and textiles. The state has also emerged as a key hub for textile-based industries, including yarn, readymade garments and hosiery. The clusters around food and dairy products are the other major sectors of the state.

Not only this, as per the latest report by World Bank, Punjab ranked 19th out of 36 states in terms of ease of doing business.

Two Types of Conversion

For converting a One Person Company (OPC) into a Private Limited Company in Chandigarh, Punjab, both voluntarily conversion and mandatory conversion, the provisions of Sec 18 of the Indian Companies Act of 2013, and the Rule 7(4) of the Companies (Incorporation) Rules of 2014 needs to be followed.

Voluntary Conversion of One Person Company (OPC) to Private Limited Company in Chandigarh, Punjab

Voluntary conversion of a One Person Company (OPC) into a Private Limited Company in Chandigarh, Punjab is only allowed after two years from the date of incorporation have been completed. However, if the paid-up share capital of the One Person Company (OPC) is more than Rs. 50 lakhs or if the average turnover is more than Rs. 2 crores then within two months of the phenomenon occur, the One Person Company (OPC) can be converted into a Private Limited Company in Chandigarh, Punjab.

One Person Company (OPC) has to file form INC 5 for informing the registrar of companies about voluntary conversion in Chandigarh, Punjab within sixty days.

Compulsory Conversion of One Person Company (OPC) to Private Limited Company in Chandigarh, Punjab

The Companies Act, 2013 laid down certain conditions if a One Person Company (OPC) meets, the OPC needs to be compulsorily converted into a Private Limited Company in Chandigarh, Punjab within 6 months of meeting the following conditions:

• The paid capital of the One Person Company (OPC) exceeds Rs. 50 lakhs and
• The annual turnover of is more than Rs 2 Cr in three immediate previous consecutive financial years

The conversion is made by just passing a special resolution in the general meeting. It is checked for a No objection certificate in written from the creditors, and the other members before the resolution are passed.

Process to convert One Person Company OPC to Private Limited Company in Chandigarh, Punjab

Board Resolutions for conversion One Person Company OPC to Private Limited Company in Chandigarh, Punjab

• Shareholders of the One Person Company (OPC) hold a general meeting and pass the resolution to increase the number of directors and shareholders.
• To convert a One Person Company (OPC) to a Private Limited Company in Chandigarh, Punjab, there should be at minimum 2 shareholders and 2 directors.
• Shareholders pass a resolution to alter the Memorandum of Association and Articles of Association of the One Person Company (OPC).
• File the e-form INC-5 with registrar of companies within 60 days of crossing the threshold limits of the paid-up capital or the turnover, informing that it has ceased to be a One Person Company (OPC).
• Further file e-Form INC-6 on the website of MCA within 6 months from the date of conversion
• The introduction of One Person Company (OPC) into legal system came into existence to encourage the entrepreneurs to enter into the corporate world. It will not only enable the individual capabilities to contribute economic growth but will also generate employment opportunity.

Provisions of Companies (Incorporation) Rules of 2014 followed by the newly formed Private Limited Company. The existing debts, liabilities, obligations or contracts of the One Person Company (OPC) in Chandigarh, Punjab remain the same.