CONVERSION OF PRIVATE COMPANY INTO ONE PERSON COMPANY

(1) 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 or 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 the general meeting.
(2) Before passing such resolution, the company shall obtain No objection in writing from
members and creditors.
3) The company shall file 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.
(4) The company shall file an application in Form No.INC.6 for its conversion into One Person Company along with fees as provided in in the Companies (Registration offices and fees) Rules, 2014, by attaching the following documents, namely
(i) The directors of the company shall give a declaration by way of affidavit duly sworn in confirming that all members and creditors of the company have given their consent for 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;
(ii) the list of members and list of creditors;
(iii) the latest Audited Balance Sheet and the Profit and Loss Account; and
(iv) the copy of No Objection letter of secured creditors.
(5) On being satisfied and complied with requirements stated herein the Registrar shall issue the certificate.

ONE PERSON COMPANY UNDER COMPANIES ACT, 2013

One Person Company (OPC):  means a company which has only one person as a member.

•   An OPC will be a private company for the provisions of this act.

Formation/ Registration:

•  No. of Members: One Member. the memorandum of One Person Company shall indicate the name of the other person, with his prior written consent, who shall, in the event of the subscriber’s death or his incapacity to contract become the member of the company and the written consent of such person shall also be filed with the Registrar at the time of incorporation of the One Person Company along with its memorandum and articles.

          (1) Only a natural person who is an Indian citizen and resident in India-

(a) shall be eligible to incorporate a One Person Company;

(b) shall be a nominee for the sole member of a One Person Company.

         (2) No person shall be eligible to incorporate more than a One Person Company or become
           nominee in more than one such company.

•  Name: “One Person Company” shall be mentioned in brackets below the name of such company, wherever its name is printed, affixed or engraved.

Meetings:

 Annual General Meeting/General Meeting:

• An OPC need not to call AGM, any business which need to be transacted at AGM or any general meeting as per the provisions of the Companies Act, 2013, shall be accepted to be duly transacted in case of OPC, if the resolution is communicated by the member to the company and entered in the minutes-book required to be maintained under section 118 and signed and dated by the member and such date shall be deemed to be the date of the meeting for all the purposes under this Act.

  Board Meeting:

• where there is only one director on the Board of Director of a One Person Company, any business which is required to be transacted at the meeting of the Board of Directors of a company, it shall be sufficient if, in case of such One Person Company, the resolution by such director is entered in the minutes-book, and signed and dated by such director and such date shall be deemed to be the date of the meeting of the Board of Directors.

• One Person Company shall be deemed to have complied with the provisions of this section if at least one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days. The provisions with respect of quorum shall not be applicable on OPC, where there is only one director on Board.

Financial Statement & Board Report:

•  Singing of Financial Statement:  In case of OPC financial Statement shall be signed by one Director before it is given to auditors for their report.

• Board Report: The report of the Board of Directors to be attached to the financial statement shall, in case of a One Person Company, mean a report containing explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report.

• Filing: One Person Company shall file a copy of the financial statements duly adopted by its member, along with all the documents which are required to be attached to such financial statements, within one hundred eighty days from the closure of the financial year

Director:

• At least one director in case of OPC and maximum of 15 directors.
• Until the directors are duly appointed and in case of a One Person Company an individual being member shall be deemed to be its first director until the director or directors are duly appointed by the member.

  

Contracts by One Person Company:

• Where One Person Company limited by shares or by guarantee enters into a contract with the sole member of the company who is also the director of the company, the company shall, unless the contract is in writing, ensure that the terms of the contract or offer are contained in a memorandum or are recorded in the minutes of the first meeting of the Board of Directors of the company held next after entering into contract

     Provided that nothing in this sub-section shall apply to contracts entered into by the company in   the ordinary course of its business.

• The company shall inform the Registrar about every contract entered into by the company and recorded in the minutes of the meeting of its Board of Directors as mentioned above, within a period of fifteen days of the date of approval by the Board of Directors.

Mandatory Conversion into Private/Public Company:

• Where the paid up share capital of an One Person Company exceeds fifty lakh rupees or 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

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