Conversion of OPC

Conversion of One Person Company to Private or Public Limited Company

One Person Company may be converted into a private company or a public company. The article seeks to enlighten the provisions regarding conversion of One Person Company into another class as provided under section 18 of the Companies Act, 2013 read with rules 3 and 6 of Companies (Incorporation) Rules, 2014.

Prayag Narain

1. Introductory note

The main advantages of One Person Company are limited liability, separation of ownership from members, perpetual succession and a single member company. With the introduction of One Person Company, more employment opportunities are generated as small entrepreneurs are encouraged to form a company with a single person without any restrictions or requirement of minimum number of members or directors as that required in private or public company. A One Person Company may be converted into a private company or a public company. The article seeks to enlighten the provisions regarding conversion of One Person Company into another class as provided under section 18 of the Companies Act, 2013 read with rules 3 and 6 of Companies (Incorporation) Rules, 2014.

2. Conversion of companies already registered

By virtue of section 18(1), a one person company registered under the Companies Act, 2013 is allowed to be converted into other class (public or private) by alteration of MoA and AoA in accordance with the provisions of Chapter II.

3. Forms of conversion

Companies Act, 2013 provides for two forms of conversion of a one person company into a another class of company, namely:

(i) compulsory conversion; and

(ii) voluntary conversion or conversion by volition.

4. Compulsory conversion