A Private Limited Company can have up to 200 shareholders, while a One Person Company has just one — with minimal compliance and limited liability. The main benefits of converting are ease of management and a lighter compliance load.
This conversion is subject to conditions: the Private Limited Company's paid-up capital must be under ₹50 lakh, its annual turnover must be under ₹2 crore across the past three consecutive financial years, and the resulting OPC's sole shareholder must be an Indian citizen and resident who hasn't incorporated or been a nominee of any other OPC.
Conversion does not erase existing liabilities — contractual obligations and debts from before the conversion remain enforceable, and the resulting One Person Company becomes liable for them.
Procedure for Conversion
- 1
Convene Board Meeting
The board approves the conversion proposal, notice is issued to members, a date is fixed for an EGM, and a No Objection Certificate is obtained from all creditors.
- 2
Convene an EGM
Special resolutions are passed to alter the Articles and Memorandum of Association.
- 3
Filing of Application
File the special resolution and explanatory statement with the RoC in Form MGT-14, attaching the altered MoA and AoA.
- 4
New Certificate of Incorporation
Once accepted, the ROC issues a fresh certificate re-incorporating the company as a One Person Company.
Frequently Asked Questions
What is the difference between a Private Limited Company and a One Person Company?
A Private Limited Company can have up to 200 shareholders; a One Person Company has just one.
What are the benefits of this conversion?
Lesser compliance and easier management.
Is there a paid-up capital requirement?
Yes — it must be under ₹50 lakh to be eligible.
Is there a turnover requirement?
Yes — annual turnover must be under ₹2 crore across the past three consecutive financial years.
What if the company is too new to have three years of turnover?
Turnover is calculated from the date of the company's incorporation.
Are existing liabilities dismissed after conversion?
No — the resulting One Person Company remains liable for pre-conversion liabilities, obligations, and debts.
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