How to convert OPC into another entity type?
OPC an entity dedicated to single entrepreneurs with an objective to facilitate a viable ecosystem such that single entrepreneurs can start their own business having a separate legal entity. OPC is chosen when: entrepreneur does not find the right co-founder; entrepreneur decides to own the business wholly; entrepreneur decides to incorporate this company form for a short period – the early stage of startup journey. As the company scales up, plans of expansion come into play, and fundraising plans come into the picture, especially external investors come into play, the general scenario is the investor would want himself or his connect to be a member of the board of directors, all for the vision of the startup. That is when entrepreneurs decide to convert the OPC into other favorable entity options. On the same note, this blog intends to answer – How to convert OPC into other entity forms?
Convert OPC to Private Limited Company:
Automatic – OPC is automatically converted if:
- Paid up capital exceeds INR 50L, or
- Turnover for 3 previous years is > INR 2C
Manual – OPC can be converted if:
- Age of company is more at least 2 years
Procedure to convert:
- Obtain ‘No Objection’ in writing from creditors
- Pass a resolution
- Affidavit Sign
- File Copy of resolution with RoC within 30 days
- File Form No.INC.6
- MOA and AOA
- Copy of latest audited balance sheet
- Copy of board resolution
- Copy of no objection letter
Convert OPC to LLP:
OPC cannot be converted into LLP, but you can incorporate Private Limited Company and then convert the Private Limited Company into LLP. When you decide to so, the shareholders will become the partners of the LLP.
Procedure to convert:
- Board meeting
- Apply for name availability
- LLP Agreement
- Filing of Forms
- Apply for incorporation
- Obtain certificate of incorporation of LLP
- Filing Form No.14 to intimate RoC
- DSC and DIN of directors
- Incorporation certificate of Private Limited entity
Convert OPC to Sole Proprietorship:
As such there are no legal formalities. You need to wind up the OPC and start a new venture as a Sole proprietorship. But the sole proprietorship can be in the name of OPC. Generally, entrepreneurs do not prefer this entity type, the reason being the defeats the main objective of enjoying limited liability.
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