A need to convert regular private limited companies arises when there is only a single person left to run operations of the company and capital or turnover reduced to threshold limit, which makes it unnecessary to keep the status of Private Limited Company.
Conversion of the company from private limited to One Person Company takes place from the date of receipt of the approval from Registrar of Companies through the change of name becomes effective on the issue of fresh Certificate. A One Person Company can be easily operated with a lesser amount of compliances, conversion of the Sole Proprietorship or Private Limited Company to One Person Company would be beneficial someone wants to carry on small business in a corporate format.
Advantages of One Person Company:
Procedure of One Person Company:
- Convene board meeting discuss following matters.
- To get Directors approval for Conversion of Company.
- Fix date, time and place for holding Extra-ordinary General meeting (EGM) to get approval of members by way of Special Resolution, for Conversion Company and to alter Memorandum and Articles of Association of the company.
- To approve notice of EGM along with Explanatory Statement to be attached to the notice of General Meeting.
- To authorize the Director or Company Secretary to issue Notice of the Extra-ordinary General meeting (EGM).
- To approve the new draft set of Memorandum of Association and Articles of Association complying the requirements of One Person Company, if any.
- Prepare minutes of such Board Meeting.
File necessary e-Forms along with attachments with Registrar of Companies.
Form MGT-14 for filling special resolution with following attachments.
- Altered Articles of Association
- Altered Memorandum of Association
- Notice of General Meeting along with explanatory statement
- Copy of Special Resolution
- Form INC-6 for applying Central Government for Conversion of Company with following attachments.
- Notice of General Meeting
- Altered Memorandum of Association
- Altered Articles of Association
- List of Creditors and Members
- Latest audited Balance Sheet and P & L Account
- Copy of Special Resolution
- NOC of Members and Creditors
The Directors of the company must declare by giving an affidavit duly confirming that all the members and creditors of the company gave their consent for conversion, the paid up share capital company is Rs. 50 lakhs or less or annual turnover is less than Rs. 2 Crores
Issue Notice of the Extra-ordinary General meeting (EOGM) to all Members, Directors, the Auditors and to all other persons entitled to such notice.
On approval of Form MGT-14 and Form INC-6 ROC issues new Certificate of Incorporation containing new name.
Convene Extra-Ordinary General Meeting of the members of the Company at place & time mentioned in Notice to transact following businesses.
- Conversion of Private Limited Company into One Person Company.
- Alterations of the Memorandum of Association of the Company.
- Alterations in Articles of Association of the Company.
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