Convert OPC to Private Limited Company — Complete Legal & Strategic Guide (2025)
Scale beyond OPC limits: conversion checklist, ROC forms, timelines, fees and compliance — simplified by RegistrationMART.
1. Why Convert OPC to Private Limited?
The OPC is perfect for solo founders — but as your business grows you may need:
- More shareholders (up to 200) and directors
- Investor-friendly structure for VC/PE
- Greater credibility for large contracts & tenders
- Ability to expand across states and internationally
| Reason | Benefit |
|---|---|
| Business Growth | Handle higher turnover & scale |
| Investment | Pvt Ltd accepted by investors |
| Governance | Stronger compliance & credibility |
2. Legal Grounds for Conversion
Conversion rules are governed by Section 18 of the Companies Act, 2013 and Rule 6 of the Companies (Incorporation) Rules, 2014. Conversion can be:
- Mandatory (compulsory) — when thresholds are breached
- Voluntary — when the owner chooses to scale
3. Types of Conversions — Mandatory vs Voluntary
Mandatory Conversion
An OPC must convert if it breaches:
- Paid-up capital > ₹50 lakhs
- Turnover > ₹2 crores for 3 consecutive FYs
Penalty for non-compliance: Company ₹10,000 + ₹1,000/day (max ₹1,00,000). Directors/officers may also be penalised.
Voluntary Conversion
Conversion may be initiated voluntarily (subject to applicable MCA conditions). Historically a 2-year restriction applied; consult latest MCA provisions where necessary.
4. Eligibility Conditions
Basic checks before converting:
- OPC must be active and compliant with ROC filings
- No pending litigation that prevents conversion
- Audited financial statements up to date
- Nominee consent available
- Minimum two shareholders after conversion
5. Step-by-Step Conversion Process (2025)
Estimate with RegistrationMART: 10–15 working days (subject to ROC timelines).
- Board Meeting — pass board resolution approving conversion and MOA/AOA alterations.
- Shareholder Approval — pass special resolution; file MGT-14 within 30 days.
- Prepare Documents — updated MOA/AOA, nominee consent (INC-3), audited financials, board/shareholder resolutions, list of proposed directors/shareholders, NOC from creditors (if required).
- File Form INC-6 — submit to ROC along with attachments.
- ROC Approval — upon verification ROC issues a fresh Certificate of Incorporation reflecting Private Limited status.
6. Key ROC Forms & Documents Required
| Form / Document | Purpose |
|---|---|
| MGT-14 | File special resolution (within 30 days) |
| INC-6 | Application for conversion to Private Limited |
| Altered MOA & AOA | Reflect Pvt Ltd objects & clauses |
| INC-3 | Nominee consent |
| Audited Financials | Latest statements |
| Board & Shareholder Resolutions | Approval evidence |
| PAN / Aadhaar of new shareholders | Identity proofs |
| Proof of Registered Office | Utility bill + NOC |
7. Timeframe & Costs Involved (Approx.)
| Item | Duration | Cost (Approx.) |
|---|---|---|
| DSC for new shareholders | 1–2 days | ₹1,000–₹2,000 |
| Board & EGM meetings | 1 day | — |
| MGT-14 filing | 1 day | ₹600–₹1,200 |
| INC-6 filing | 3–5 days | ₹2,000–₹5,000 |
| ROC approval | 3–7 working days | Variable by state |
| Total | 10–15 working days | Professional fee from ₹7,499 + ROC charges |
8. Post-Conversion Compliance Checklist
- Update PAN/TAN records and bank KYC with new Certificate of Incorporation.
- Inform clients, vendors and government bodies (if applicable) with new CIN.
- Issue share certificates to new shareholders.
- Update statutory registers and board minutes.
- Re-appoint auditor if required and comply with Pvt Ltd statutory timelines.
9. Tax & Compliance Impact Post Conversion
Conversion itself is typically not a taxable event (refer Section 47(xiii) of the Income Tax Act). However:
- Tax rates remain corporate rates (approx 25% if turnover < ₹400 Cr); options for concessional schemes depend on eligibility.
- Pvt Ltd opens up broader deductions and investor-related structures (ESOPs, equity instruments).
- GST/TDS and other registrations may require updates.
10. Common Mistakes to Avoid
- Delaying MGT-14 filing after shareholder resolution.
- Failing to properly alter MOA/AOA to reflect Pvt Ltd clauses.
- Not increasing number of shareholders/directors where required.
- Neglecting PAN/TAN/GST updates and bank KYC changes.
- Insufficient documentation for creditors/NOCs where liabilities exist.
11. FAQs — Quick Answers
- Q1. Is conversion mandatory if I crossed ₹2 Cr turnover last year only once?
- A1. If turnover crosses ₹2 Cr and triggers conditions under Rule 6, mandatory conversion is triggered. Check whether the rule applies to single-year breach vs. 3 consecutive years in your specific case — consult an expert.
- Q2. Can I add a foreign shareholder during conversion?
- A2. Yes — subject to FEMA rules and sectoral caps. Proper KYC and filings are required.
- Q3. Are there capital gains tax implications on conversion?
- A3. Generally no capital gains tax if conversion adheres to Section 47(xiii) of the Income Tax Act — but confirm with your tax advisor for edge cases.
- Q4. What if my OPC has outstanding loans?
- A4. Conversion is possible but creditors should be informed; some lenders may require NOCs or additional documentation.
12. RegistrationMART’s OPC Conversion Service
RegistrationMART brings 10+ years of company law experience and end-to-end support for OPC conversions:
- Drafting MOA & AOA and resolution templates
- Handling Board/EGM formalities and MGT-14 filing
- Filing Form INC-6 and coordinating with ROC
- Post-conversion compliance, PAN/TAN/GST updates and bank KYC assistance
- Free advisory for 6 months after conversion
Conclusion — Move Up, Scale Fast
If your OPC has outgrown its statutory or strategic limits, converting to a Private Limited company unlocks capital, governance and market opportunities. With correct documentation and timely filings, conversion can be smooth and quick.
Ready to convert? Book a consultation with RegistrationMART and we’ll handle the entire conversion end-to-end.
