Conversion of a One Person Company (OPC) into a Private Limited Company in Delhi NCR

A One Person Company (OPC) can be converted in to a Private Limited Company in Delhi NCR as per Section 18 of the Companies Act, 2013. There are two ways through which a One Person Company (OPC) in Delhi NCR 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 Delhi NCR.

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 Delhi NCR.

Conversion of a One Person Company (OPC) into a Private Limited Company in Delhi NCR

Delhi is the capital of India and Haryana is the adjoining state. The key industries in Delhi includes IT (Information Technology), ITeS (IT enabled Services), Telecommunications, Travel & Tourism, Hotels, Banking, Media, etc. The major manufacturing industries of Delhi hosts sectors like consumer goods industries with head office and manufacturing offices in and around Delhi. Delhi NCR comprises of towns like Gurgaon, Noida, Faridabad and Ghaziabad. Out of this Gurgaon and Faridabad are in the state of Haryana and Noida and Ghaziabad are in the state of Uttar pradesh (UP). Many Private Limited companies with their registered or corporate offices in Delhi has established their manufacturing or operational units in NCR towns or other surrounding places in state of Haryana.

Delhi is among the fastest economically growing regions in India with a consistent growth rate of 12.82% in last FY. The capital city of Delhi is a famous destination for tourists, with rich cultural heritage, historic monuments and variety foods. Form years, Delhi has been organizing trade fairs and conventions for promotion of trade and business. With attractive real estate market, it house various head quarters of large companies and thus offering immense business potential.

Delhi has Central Government offices, Ministry offices, headquarters of several PSU and Departments that any new business may require. Delhi is well connected through Road, Rail and Air network from all important domestic and international destinations. Delhi Metro with 285 stations linking Delhi with other neighbouring National Capital Region (NCR), is constantly and rapidly expanding its footprints.

Not only this, as per the latest report by World Bank, Delhi ranked at 12th out of 36 states in terms of ease of doing business while Haryana ranked as 6th in ease of doing business ranking. Delhi ranks as first in India for subcategories like “starting a business” in the rankings of “Ease of Doing Business”.

Two Types of Conversion 

For converting a One Person Company (OPC) into a Private Limited Company in Delhi NCR, 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 Delhi NCR

Voluntary conversion of a One Person Company (OPC) into a Private Limited Company in Delhi NCR 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 Delhi NCR.

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

Compulsory Conversion of One Person Company (OPC) to Private Limited Company in Delhi NCR

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 Delhi NCR 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 Delhi NCR

Board Resolutions for conversion One Person Company OPC to Private Limited Company in Delhi NCR

• 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 Delhi NCR, 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 Delhi NCR remain the same.