Conversion of One Person Company into Private or Public Company in Coimbatore
One person Company to convert itself into a public company or a private company
One person company is nothing but a type of the company registration and as the name itself we can understand this type of company. There should be only one person as a director and he is only responsible for each and every process by the company. A One Person company is eligible for convert itself into a private or public, if it operates as a one person company in two years. It should be suitable for certain companies, which it’s paid up capital and annual turnover is limited as mentioned in the Rules and Regulations of an OPC. If it crosses the limitation, every one person company has get conversion itself into a public company or a private company in certain cases. The conditions are given below:
- Where the paid up share capital of a One Person Company [Exceeds fifty lakh rupees and its average annual turnover during the relevant period] exceeds two crore rupees, it shall cease to be entitled to continue as a One Person company.
- Such One Person Company shall be required to convert itself, within six months of the date on which its paid up share capital is increased beyond fifty lakh rupees or the last day of the relevant period during which its average annual turnover exceeds two crore rupees as the case may be, into either a private company with minimum of two members and two directors or a public company with at least of seven members and three directors in accordance with the provisions of section 18 of the Act.
- The One Person Company shall alter its memorandum and articles by passing a resolution in accordance with sub-section (3) of section 122 of the Act to give effect to the conversion and to make necessary changes incidental thereto.
- The One Person Company shall within period of sixty days from the date of applicability of sub-rule (1), give a notice to the Registrar in Form No. INC.5 informing that it has ceased to be a One Person Company and that it is now virtue of it’s paid up share capital or average annual turnover, having exceeded the threshold limit laid down in sub-rule (1). For the purposes of this rule,- “relevant period” means the period of immediately preceding three consecutive financial years;
- If One Person Company or any officer of the One Person Company contravenes the provisions of these rules, One Person Company or any officer of the One Person Company shall be punishable with fine which may extend to ten thousand rupees and with a further fine which may extend to one thousand rupees for every day after the first during which such contravention continues.
- A one person company can get itself converted into a private or public company after increasing the minimum number of members and directors to two or minimum of seven members and two or three directors as the case may be, and by maintaining the minimum paid-up capital as per requirements of the Act for such class of company and by making due compliance of section 18 of the Act for conversion.
Conversion of private company into One Person Company
- A private Company other than a company registered under section 8 of the Act [having paid up share capital of fifty lakhs rupees or less and average annual turnover during the relevant period] is two crore rupees or less may convert itself into one person company by passing a special resolution in general meeting.
- Before passing such resolution, the company shall obtain no objection in writing from members and creditors.
- The One Person Company shall file a copy of the special resolution with the Registrar of Companies within thirty days from the date of passing such resolution in Form No. MGT. 14.
- The One Person Company shall file an application in Form No. INC.6 for its conversion into One Person Company along with fees as provided in the Companies (Registration offices and fees) Rules, 2014 by attaching the following required documents:
- The directors of the company shall give a declaration by way of affidavit duly sworn in conforming that all members and creditors of the company have given their consent for such type of conversion, the paid up share capital company is fifty lakhs rupees or less or average annual turnover is less than two crores rupees, as the case may be;
- The list of members and list of creditors;
- The latest Audited Balance sheet and the Profit and loss account; and
- The copy of No objection letter of secured creditors.
- On being satisfied and complied with requirements stated herein the Registrar shall issue the certificate.
If a One Person Company or any officer of such company contravenes any of the provisions of these rules, the One Person Company or any officer of such kind of company shall be punishable with fine which may extend to five thousand rupees and with a further fine which may extend to five hundred rupees for every day after the first offence during which such contravention continues.
For more details about One Person Company registration in Coimbatore – > Click here.