Conversion of a One Person Company (OPC) into a Private Limited Company in Jammu, Kashmir, UT Ladakh

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

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 Jammu, Kashmir, UT Ladakh.

Conversion of a One Person Company (OPC) into a Private Limited Company in Jammu, Kashmir, UT Ladakh

Being largest producer of apples, walnuts and cherries in India the union territories of Jammu and Kashmir present a strong horticulture sector and a vibrant floriculture sector. Jammu and Kashmir are also one of the major locations for the manufacturing of handloom and handicraft products. Jammu and Kashmir are home to the world’s finest Bivoltine silk and Pashmina wool. The handloom sector alone employees about 43,000 weavers and contributes $ 28.57 Mn through the export towards J&K’s GDP. Carpets, Shawls and Paper Mache are major handicraft items produced that . Handlooms sector that contributed $ 131.09 Mn in 2018-19 through exports.

The UTs of Jammu and Kashmir lies in the Greater-Himalayan range and are enclosed with valleys and mountains. Jhelum, Chenab and Ravi are the major rivers of the UTs of J&K. The UTs of Jammu and Kashmir are well-connected with an international airport in Srinagar and a domestic airport in Jammu. The UT is home to about 57 industrial estates. Kashmir is India’s largest producer and exporter of one of the most expensive spices Saffron. Kashmir Willow bats made out of Willow trees of J&K are widely used in the game of cricket across the world.

Not only this, as per the latest report by World Bank, Jammu & Kashmir ranked 21st 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 Jammu, Kashmir, UT Ladakh, 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 Jammu, Kashmir, UT Ladakh

Voluntary conversion of a One Person Company (OPC) into a Private Limited Company in Jammu, Kashmir, UT Ladakh 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 Jammu, Kashmir, UT Ladakh.

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

Compulsory Conversion of One Person Company (OPC) to Private Limited Company in Jammu, Kashmir, UT Ladakh

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 Jammu, Kashmir, UT Ladakh 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 Jammu, Kashmir, UT Ladakh

Board Resolutions for conversion One Person Company OPC to Private Limited Company in Jammu, Kashmir, UT Ladakh

• 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 Jammu, Kashmir, UT Ladakh, 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 Jammu, Kashmir, UT Ladakh remain the same.