The MCA has amended Companies (Incorporation) Rules, 2014 to allow a non-resident Indian to form a One Person Company (OPC) and to relax the norms for conversion of OPC into a public company or private company and private company to OPC, as under :
Sub-rule (7) of Rule 3, which barred a OPC from converting voluntarily into any kind of company unless two years had expired from the date of incorporation of OPC and upon the paid up share capital exceeding fifty lakh rupees or its average annual turnover during the relevant period exceeding two crore rupees, has been omitted.
“ 6. Conversion of One Person Company into a Public company or a Private company.-
(1) The One Person company shall alter its memorandum and articles by passing a resolution in accordance with subsection (3) of section 122 of the Act to give effect to the conversion and to make necessary changes incidental thereto.
(2) A One Person company may be converted into a Private or Public Company, other than a company registered under section 8 of the Act, after increasing the minimum number of members and directors to two or seven members d two or three directors, as the case may be, and maintaining the minimum paid-up capital as per the requirements of the Act for such class of company and by making due compliance of section 18 of the Act for conversion.
(3) The company shall file an application in e-Form No.INC-6 for its conversion into Private or Public Company, other than under section 8 of the Act, along with fees as provided in the Companies (Registration offices and fees) Rules, 2014 by attaching documents, namely:
Form INC.5 which provided for notice to the Registrar informing that the OPC has ceased to be a OPC on account of increase in the threshold limit of paid up share capital and average annual turnover, has been omitted and Form INC. 6 which is the application for conversion of private company into OPC has been substituted.
To refer to the notification dated 1 February 2021 of Companies (Incorporation) Second Amendment Rules, 2021, click here.
The Bar Council of India does not permit solicitation of work and advertising by legal practitioners and advocates. By accessing the Shardul Amarchand Mangaldas & Co. website (our website), the user acknowledges that: