Private Limited to OPC
The conversion of PLC (Private limited company) into an OPC (One Person Company) is provided as per the Companies Act, 2013, which implements a mechanism to convert one class of company into another. Section 18 of the Act, explicitly grants the conversion of an already registered private limited company starting from 1 April 2014.
The conversion of PLC to OPC would not affect the responsibilities and contractual obligations of the company before conversion, and such claims, liabilities, obligations shall be enforceable by law, and the resulting OPC shall be liable for them.
Checklist requirements for the conversion of PLC to OPC
Here are some requirements to be followed to convert the private limited company into a one-person company:
- The company should have suitably prepared its books of accounts as well as its balance sheet.
- The company has listed and filed all ROC (Registrar of Companies) returns.
- To examine whether the company has paid requisite on the result of the share certificate and that the share certificates are properly matched with the payment of stamp duty.
- The company has deducted all TDS (Tax Deducted at Source) and filed relevant TDS returns.
- The company has paid VAT and Service Tax, or GST, and filed suitable returns before initiating the conversion.
- To check whether the company is maintaining a record of minutes of the meeting, for its board and shareholders, and keep updated registers at its registered office.
- The company is registered under the shop and the establishment acts as per the applicable state laws, where they control offices, shops, warehouses, etc.
- The company complies with the requirements of the professional tax, if applicable in the state where the registered office of the company is located and the states in which it has employees.
- The company is registered under PF, if the number of employees is more than 20 and with ESIC (Employees State Insurance Corporation), if the number of employees is more than 10, and if its listing monthly returns and paying dues as expected under PF and ESIC.
A private limited company can be changed into the one-person company based on the following provisions:
- The provided capital of the company is less than Rs. 50 lakhs.
- The annual turn over of the company should be less than Rs. 2 crores during the past three progressive financial years. Additionally, if the company is new, and has not completed three years, then the turnover shall be considered from the date of its incorporation.
- The shareholder of the resulting OPC shall be only one individual of Indian nationality.
- The shareholder of the OPC is a person residing in India for 180 days of one calendar year.
- The shareholder of the resulting OPC must not have incorporated any other OPC, or he/she is not a candidate of any other OPC.
- A minor cannot be a member or part of an OPC.