TRANSFORMING AN OPC INTO A PRIVATE LIMITED COMPANY: PROCEDURES AND BENEFITS

AUTHOR – ARYAN ANAND,STUDENT OF BA LL.B (HONS.), CHANDIGARH UNIVERSITY

BEST CITATION – ARYAN ANAND, TRANSFORMING AN OPC INTO A PRIVATE LIMITED COMPANY: PROCEDURES AND BENEFITS, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (1) OF 2025, PG. 01-04, APIS – 3920 – 0001 & ISSN – 2583-2344.

Abstract:

The current paper is associated with the procedures involved in transforming an OPC into a PLC, which falls under the jurisdiction of the Companies Act of 2013. The idea behind this topic in this introductory chapter gives background regarding the creation of a legal entity form of OPC where particularly it is established in a way that in one OPC form one person acts both as its member and also its director as it is otherwise for PLC for Private Limited Companies as it compulsorily includes two members along with directors to create such company. It is further mentioned that one of the main reasons for converting an OPC into a PLC is the increase in membership, capital limits, better liability management, and increased business reputation. The arguments for not staying as an OPC, which include attracting more investors, the need for joint decision-making, and more effective exit strategies are also put forth. The procedure for conversion is then thoroughly examined through such steps as, the calling of a Board meeting, the adoption of requisite resolutions, the submission of Form No. INC 6 to the Registrar of Companies, changes in the Memorandum of Association and Articles of Association, and the granting of the notification of the Certificate of Incorporation. Lastly, the responsibilities involving the incorporation where such incorporation must involve the directors and the shareholders of the OPC, are also provided. Conversion of OPC into a private company begins with Directors overseeing the entire process by being compliant with legal requirements and communicating with shareholders. Shareholders on the other hand are crucial in making resolutions and restructuring the company’s capital ratio. The conclusion of the article addresses the problems in the conversion process and conflicts between directors and shareholders.

Keywords: One Person Company, Private Limited Company, Conversion Procedure, Shareholders and Directors, Corporate Governance, Capital Structure, Legal Compliance