Conversion of a One Person Company (OPC) into a Private Limited Company in Hyderabad, Telangana

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

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 Hyderabad, Telangana.

Conversion of a One Person Company (OPC) into a Private Limited Company in Hyderabad, Telangana

Hyderabad is the largest city and the capital of the southern state of Telangana. The state of Telangana hosts various manufacturing sector and services sector companies that are operational in and around Hyderabad. Few main Industries that contributes to the GDP of the Telangana state includes Automobiles and auto components industry, textiles, spices, mining and minerals, pharmaceutical, horticulture, poultry farming, etc Talking about Hyderabad, it is becoming a hub for IT and ITES companies with state of the art infrastructure and facilties. Telangana state ranked 2nd as the best state in terms of ease of doing business. As such startups and running business prefer the Hyderabad in the state of Telangana for the process of Limited Liability Partnership (LLP) Registration in Hyderabad.

The state of Telangana is the leading business destination for horticulture crops, Sericulture and fisheries, manufacturing units in pharmaceuticals, units of food processing, industrial units for non-metallics minerals, plastics or electrical equipment. The city of Hyderabad also hosts the film industry with world’s largest film studio, Ramoji Film City.

Telangana is second largest exporter in India and ranks 2nd in terms of Export Preparedness Index 2020 under category of Landlocked states. Hyderabad, capital of state Telangana, is one of the epicenter of IT and ITes Businesses. Not only IT, state also contributes big-time in pharmaceutical exports. With extensive road network of over 27,600 km, 24 national highways along with an international airport in Hyderabad, the city provide the proper connectivity across India and various other parts of the world. With 67 notified SEZ (Special Economic Zones), it becomes the perfect choice for registration of Limited Liability Partnership (LLP) in Hyderabad, Telangana.

To facilitate business start in the state, it has the Industrial Project Approval and Self-certification System (TS-iPASS) Act, that mandates the clearances to any mega projects within 15 days. For other projects the timelines is for 30 days. Such timelines are the best in India. Apart form this, the state of Telangana introduced ‘Right to Clearance’ for industries for necessary clearances within specified timelines. Telangana received the investments of USD 11.5 billion in last 5 years after the launch of new Industrial Policy in 2015.

Not only this, as per the latest report by World Bank, Hyderabad ranks 2nd in terms of ease of doing business and first in India for subcategories like “enforcing contracts and resolving insolvency” in the rankings of “Ease of Doing Business. In terms of parameter “ start a business”, which is very relevant for startups for registration of Limited Liability Partnership (LLP) in Hyderabad, Telangana, ranks 4th city in India.

Two Types of Conversion

For converting a One Person Company (OPC) into a Private Limited Company in Hyderabad, Telangana, 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 Hyderabad, Telangana

Voluntary conversion of a One Person Company (OPC) into a Private Limited Company in Hyderabad, Telangana 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 Hyderabad, Telangana.

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

Compulsory Conversion of One Person Company (OPC) to Private Limited Company in Hyderabad, Telangana

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 Hyderabad, Telangana 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 Hyderabad, Telangana

Board Resolutions for conversion One Person Company OPC to Private Limited Company in Hyderabad, Telangana

• 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 Hyderabad, Telangana, 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 Hyderabad, Telangana remain the same.