Convert OPC to Private Limited Company

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Know about conversion of OPC to a Private Limited Company

Converting One Person Company to a Private Company can open avenues to pursue additional benefits such as fund raising. An OPC can voluntarily convert itself only after 2 years of its incorporation. The application of conversion is made to Central Government after alternation of MoA and AoA of the OPC. The legal existence of the company continues even after the conversion and so do their rights and liabilities. With its conversion into Private Company, minimum 2 shareholders and directors must be appointed to fulfil the minimum requirement. Conversion helps with the growth opportunities along with additional funding options of private placement funding, ESOP and many more.

Benefits of Conversion of OPC to a Private Limited Company

Easier to Raise Funds
Raising funds as a private limited company is a comparatively easy task as it gives an opportunity for raising shares and has many ways to raise funds in the form of private equity, ESOP, and more.
Limited Liability of Owners
The obligation or debts of the company does not create a charge over the owner’s personal assets. Their liability is limited only to the subscribed capital unpaid by them.
Taxation Benefits
One Person Company is not recognized under the Income Tax Act and hence it has been put in the same category as other companies for taxation purpose. Private companies have been placed under the tax bracket of 30% on total income. Thus, from the perspective of taxation, the concept of One Person Company becomes a less profitable concept as it imposes a heavy financial load.
Separate Legal Existence
A Private Limited Company is registered, a legal entity is born in eyes of law, which is separate from its owners and managers. The company can operate in its own name from opening a bank account to own assets and enter into a contract with parties. This also provides the capacity to sue third parties.

Documents Required to convert OPC to Pvt Ltd company

PAN Card
PAN Card of shareholders and Directors.
Foreign nationals must provide a passport.
In case of NRI or Foreign National, documents of partner must be notarized or apostilled
Identity Proof
Voter ID/ Passport/ Driving License of Shareholders and Directors
Address Proof
Telephone Bill /Electricity Bill/ Latest Bank Account Statement of Shareholders and Directors
Latest Passport size photograph of Shareholders and Directors
Financial Statements
Duly certified copy of latest audited Finacial Statements
Incorporation documents of the OPC
Certificate of Incorporation, MoA & AoA to be provided

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Convert OPC into Private Company in 3 Easy Steps

  • Spare less than 10 minutes to fill our online Questionnaire
  • Provide basic details & documents required for registration
  • Make payment through our secured gateways
  • Assigned Relationship Manager
  • Procurement of Digital Signatures (DSC)
  • Approval from Central Government for Voluntary Conversion
  • Increase in the Authorized Share Capital
  • Alteration of MoA & AoA
  • Application for PAN & TAN
  • All it takes is up to 20 working days*

*Subject to Government Processing Time

Process of converting OPC to Pvt. Ltd.

  • Consultancy and assistance for conversion
  • Collection of basic information & documents
  • Application of DSC of new director
  • Drafting of necessary resolutions
  • Drafting of other required documents & affidavit
  • Alteration of MoA & AoA
  • Provide required documents drafted after the signature
  • Online filing of form for alteration in MoA & AOA
  • Government processing time to approve the application*
  • Online filing of form INC – 6 for voluntary conversion
Explore one person company to private limited company conversion

Frequently Asked Questions

What are the conditions for converting OPC to a private limited company?
The OPC must convert itself into a Private Company in case of the following situations:
– If the paid-up share capital of the OPC hits more than ₹ 50 lakh.
– If the annual turnover exceeds ₹ 2 crores consecutively for the last three (3) years.
What is to be done by the company after converting OPC to private limited company?
After the OPC is converted into a Private Limited Company, it is obligatory for the company to increase its paid-up share capital to ₹ 50 Lakh or the annual turnover to ₹ 2 Crore or more. If the company fails to comply with these provisions, it shall covert back itself to an OPC by passing a special resolution.
Whether the OPC can voluntarily proceed for its conversion?
Yes, OPC may voluntarily convert itself into a Private Company or Public Company subject to certain condition. The OPC may apply for voluntary conversion only if a period of two years has been passed since its incorporation.
Can an OPC be converted or incorporated as a non profit organization?
NO, an OPC cannot be incorporated as or converted into a company for non-profit, charitable purpose, and it cannot carry out non-banking, financial, or investment activities including investment in securities of any corporate body.
What is the effect after conversion of OPC to a private limited company on the liabilities of the previous company?
After the conversion, the liabilities, debts or obligation of the company shall not be affected in any way. Hence, the company shall be liable for all its previous obligations.
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