Convert your Business - Private to One Person Company


Private Limited Company is the most popular and widespread type of legal unit in India. In-order to register a private limited company, a minimum of two directors and two shareholders are needed. A natural person can be both – a shareholder and a director, while a corporate legal entity can only be a shareholder. Private Limited Company registration is supervised by the Ministry of Corporate Affairs, Companies Act, 2013 and the Companies Incorporation Rules, 2014. Distinctive characteristics of a private limited company include ability to generate equity funds, limited liability protection to shareholders and separate legal entity make it most desirable type of business that are maintained exclusively. Additionally, Foreign Corporate Entities or NRIs and Foreign nationals are permitted to be Shareholders and/or Directors of a company with Foreign Direct Investments making it a suitable choice for foreign promoters.


In India, the concept of a One Person Company was introduced via Companies Act, 2013 to aid entrepreneurs with the potential of starting a venture by authorizing them to create a single person economic entity. One of the substantial benefits of a One Person Company is, it requires only one member while a minimum of two members are needed for incorporating and operating Limited Liability Partnership or a Public Limited Company. Just as with a Company, the One Person Company is a separate legal entity from its promoter, offering limited liability protection to its sole shareholder, making it easy to incorporate while enjoying continuity of business. Although a single Entrepreneur is entitled to operate a corporate entity with limited liability, a One Person Company does have its limitations. For example, a natural living person cannot be the nominee of more than a single One Person Company as it already includes a natural person at any point of time. Only after receiving prior written consent can the subscriber to the memorandum of a One Person Company nominate a person to be appointed to the OPC in the event of the subscriber’s departure or demise.

Advantages of registering as OPC

Single Person in OPC

In India, a One Person Company is a type of corporate entity that can be initiated and maintained by a sole promoter with limited liability protection. A One Person Company is a corporate form of legal entity with sole existence and easy transfer of ownership.

Unlimited Existence

A company enjoys ‘perpetual succession’ which means, the company remains in continuous existence until it is legally dissolved. As a separate legal person, a company is unaltered by the departure of demise of any member and will continue to endure irrespective of the modifications in the ownership.

Can Transfer Easily

Ownership of a business entity can be transferred easily in a company by transferring shares. The process of signing, filing and transfer of share transfer form and share certificates are adequate to transfer ownership of a company whereas, the ownership in One Person Company can be transferred by changing the shareholders, nominee director information and directorship.

Borrowing Limit

Financial Institutions and Banks prefer funding a company rather than proprietary concerns or partnership firms. However, a sole person company has its borrowing limitations as it may not be able to provide varied kinds of equity security, as it may not be owned by one person at all times.

Owning Property

A company being an artificial person, can own, obtain, enjoy and trade property on its name. The property granted to a company could be land, machinery, residential property, factory, intangible assets, etc. Further, while serving as a nominee director, the individual cannot claim for the ownership of the company.

Process of Conversion of Private Limited Company into OPC

Convene a board meeting

In order to decide the conversion of private company into OPC, the directors of the company must meet and determine a date for the general meeting of the shareholders.

A notice is required to be served to the shareholders along with draft resolution concerning the conversion of the private limited company to a One Person Company.

Issue notice of EGM

All the directors, auditors and members must be given a notice of the EGM (Extra ordinary General Meeting). The date of issue is supposed to be 21 days prior to the date of EGM.

Concurrently, the draft resolution should be given as a special resolution and it must also include an informative statement along with the agenda and the notice.

No objection from all creditors

Prior to the EGM a No Objection Certificate (NOC) should be obtained from all the creditors of the company. A copy of approval from the creditors must be settled before the EGM.

Conduct of EGM

The EGM can pass exclusive resolution for conversion of Private Limited Company to One Person Company along with the changes of Memorandum of Association (MOA) and Articles of Association (AOA). The EGM is required to be operated as per the notice, at the assigned time, place and date.

Filing of resolution with the ROC

In accordance of the Companies Act, 2013, all the resolutions declared by the members as special resolutions must be registered with the ROC in Form No MGT-14, along with the required attachments, within 30 days from the approaching date. The ROC records the resolution on endorsement of the MGT-14 form.

How to apply for conversion?

The application for the conversion of a Private Limited Company to a One Person Company is filed using Form-INC-6 with the following statements:

  •       All the members, creditors and directors of the company must submit a declaration in the form of an affidavit stating that they have given consent to the conversion of company into an OPC. The affidavit must also state that the paid-up capital of the company is less than Rs. 50 lakhs and the turnover is less than Rs. 2 crores.
  •            Affidavits confirming the average turnover is less than 2 crores in the past 3 successive financial years and the paid-up capital is less than Rs. 50 lakhs.
  •        In order to confirm the paid-up capital is less than Rs. 50 lakhs and turnover less than 2 crores, a certificate from the practicing Chattered Accountant must be supplied.
  •         The latest audited balance sheet and profit & loss statement of the company should be supplied.

·         All the Creditors are required to supply No Objection Certificate (NOC).

·         List of all the directors and members of the company should be given,

·         Along with its agenda, informative statements and notices, the specific resolution and a copy of board resolution should be taken at EGM.

·         A copy with MOA and AOA changes, including related clauses, is mandatory for OPC.

The issue of the certificate of conversion

  •        On acceptance of the application for conversion, the Registrar of Companies having jurisdiction examines the application, and if complete, it is approved and issues a certificate of Private Limited Company into One Person Company.
  •       On submission, the Registrar of Companies possessing jurisdiction examines the application and if complete, will approve and issue a certificate converting the Private Limited Company into a One Person Company.