Step-by-Step Guide
6 Steps
How to Convert an OPC to a Private Limited Company
Complete step-by-step guide to converting a One Person Company (OPC) to a Private Limited Company in India in 2026. Covers mandatory and voluntary conversion thresholds, Form INC-6 filing on MCA portal, share allotment to new shareholders, MOA and AOA alteration, director appointments, and post-conversion compliance.
Quick Overview
Estimated Cost
₹15000
Time Required
15 to 30 Days
Total Steps
6 Steps
What You'll Need
Documents Required
- Certificate of Incorporation of the OPC
- Memorandum and Articles of Association of the OPC
- Board Resolution for conversion from OPC to Private Limited Company
- Special Resolution of the sole member approving conversion (for voluntary conversion)
- Form INC-6 (Application for Conversion of OPC to Private Limited Company)
- Consent of new shareholders and directors (Form DIR-2 and INC-9)
- NOC from creditors (if applicable)
- Audited financial statements of the OPC
- Altered MOA and AOA reflecting Private Limited Company provisions
- Proof of registered office address (rental agreement, NOC, utility bill)
Tools & Prerequisites
- Internet access for the MCA V3 portal at mca.gov.in
- Valid Digital Signature Certificate (DSC) for all directors registered on MCA portal
- Director Identification Number (DIN) for new directors being appointed
- Chartered Accountant or Company Secretary for document preparation and filing
- GST portal access for registration amendment
A One Person Company (OPC) is an excellent starting structure for solo entrepreneurs who want limited liability protection without partners. However, as the business grows - bringing in co-founders, raising investment, or exceeding turnover thresholds - converting the OPC to a Private Limited Company becomes necessary. This conversion can be mandatory (when statutory thresholds are breached) or voluntary (when the entrepreneur chooses to upgrade).
This guide covers both scenarios in detail, including the complete Form INC-6 filing process on the MCA portal, share allotment to new shareholders, MOA and AOA alteration, director appointments, and post-conversion compliance. Whether you are converting because you have to or because you want to, this step-by-step guide walks you through the entire process.
Mandatory vs Voluntary Conversion
| Parameter | Mandatory Conversion | Voluntary Conversion |
|---|---|---|
| Trigger | Paid-up capital exceeds 50 lakh or average turnover exceeds 2 crore | Promoter's decision to bring in partners, investors, or scale |
| Time limit | Must file Form INC-6 within 6 months of threshold breach | No time limit - can be done anytime |
| Minimum OPC age | No minimum age requirement | OPC must have completed at least 2 years |
| Resolution required | Board Resolution | Board Resolution + Special Resolution of sole member |
| Penalty for non-compliance | Up to 10,000 rupees + 1,000 rupees per day of continuing default | Not applicable (voluntary) |
Many OPC founders are unaware that their company has breached the mandatory conversion thresholds until it is too late. Regularly monitor your paid-up capital and turnover. If your business is growing rapidly, it may be wise to voluntarily convert before the mandatory thresholds are triggered. This gives you more time to plan the conversion properly and bring in the right shareholders and directors.
What You Need Before Starting
New Shareholders and Directors
A Private Limited Company requires at least 2 shareholders and 2 directors. Your OPC currently has 1 member and 1 or more directors. You need to identify:
- At least 1 new shareholder who will subscribe to shares
- At least 1 new director if the OPC only has 1 director (can be the same person as the new shareholder)
- All new directors need a DIN - apply through the DIN application process
- All directors (existing and new) need a valid DSC registered on the MCA portal
Share Allotment Planning
Decide the share structure before filing:
- How many shares will be allotted to each new shareholder
- What will be the issue price - at face value or at premium
- Whether the existing authorized capital is sufficient or needs to be increased
- What ownership percentage each shareholder will hold after allotment
Step-by-Step Conversion Process
Step 1: Pass Board Resolution and Special Resolution
Hold a Board Meeting and pass a Board Resolution approving:
- Conversion of the OPC to a Private Limited Company
- Alteration of the MOA and AOA
- Allotment of shares to new shareholders
- Appointment of new directors
- Authorization of a director to file Form INC-6
For voluntary conversion, the sole member must also pass a Special Resolution in writing approving the conversion.
Step 2: Alter the MOA and AOA
The Memorandum and Articles of Association must be amended to remove OPC-specific clauses:
- Remove the nominee clause (specific to OPC)
- Remove the restriction that the company can have only 1 member
- Update the subscribers page to include all shareholders
- Add provisions for Board Meetings, AGM, and general meetings (OPC was exempt from some)
- Ensure the AOA aligns with Table F of Schedule I of the Companies Act
Step 3: Obtain NOC from Creditors
If the OPC has any outstanding loans or significant trade creditors, obtain No Objection Certificates from them. If there are no creditors, prepare a self-declaration by the director stating that the company has no outstanding debts, or that all creditors have been informed and no objections have been received.
Step 4: File Form INC-6 on MCA Portal
- Log in to MCA V3 portal at mca.gov.in
- Navigate to MCA Services > Company Forms > Form INC-6
- Enter the CIN of the OPC - the form auto-populates company details
- Select conversion type: mandatory or voluntary
- Fill in details of new shareholders and directors
- Upload required documents:
- Board Resolution and Special Resolution (if voluntary)
- Altered MOA and AOA
- Form DIR-2 (consent of new directors)
- Form INC-9 (declaration by directors and subscribers)
- NOC from creditors or self-declaration
- Latest audited financial statements
- List of all proposed members and directors
- Sign using DSC of the director and verify by a CA/CS/Cost Accountant
- Pay the government fee and submit
- Note the SRN for tracking the application status
Form INC-6 must be certified by a practicing Chartered Accountant, Company Secretary, or Cost Accountant. They verify that all requirements have been met and the documents are in order. This professional certification is mandatory and the form will not be accepted without it.
Step 5: Receive Altered Certificate of Incorporation
The ROC reviews the application and, if satisfied, issues an altered Certificate of Incorporation. This certificate confirms:
- The company is now a Private Limited Company
- The new CIN reflecting the changed company type
- The effective date of conversion
Step 6: Complete Post-Conversion Filings
After receiving the altered certificate, complete these filings:
- Form PAS-3 (Return of Allotment): File within 15 days of share allotment to new shareholders
- Form DIR-12: File for appointment of new directors
- Form MGT-14: File for registration of Special Resolution with ROC
- Update bank accounts with the new Certificate of Incorporation
- Update GST registration to reflect new company type
- Update company letterheads, stationery, rubber stamps, and signage
Post-Conversion Compliance Changes
After conversion, the company is subject to full Private Limited Company compliance requirements:
| Compliance | OPC Requirement | Private Limited Requirement |
|---|---|---|
| Board Meetings | At least 1 Board Meeting every half year | At least 4 Board Meetings per year (1 each quarter) |
| Annual General Meeting | Not required | Must hold AGM within 6 months of financial year end |
| Annual Return | Form MGT-7A (simplified) | Form MGT-7A (within 60 days of AGM) |
| Financial Statements | Form AOC-4 (within 180 days of FY end) | Form AOC-4 (within 30 days of AGM) |
| Director KYC | DIR-3 KYC by September 30 | DIR-3 KYC by September 30 for all directors |
| Statutory Audit | Mandatory | Mandatory |
| Minutes of Meetings | Simplified for single-director OPC | Full minutes preparation and maintenance |
For a complete guide to ongoing annual compliance, refer to our Private Limited Company annual return filing guide.
Cost Breakdown
| Component | Estimated Cost |
|---|---|
| Government fee for Form INC-6 | 200-600 rupees |
| Form PAS-3 filing fee | 200-300 rupees |
| Form DIR-12 filing fee | 200-300 rupees |
| DSC for new directors | 1,000-2,000 rupees per person |
| Stamp duty on share allotment | Varies by state (typically 0.1-0.5% of share value) |
| Professional fees (CA/CS) | 8,000-20,000 rupees |
| Form SH-7 (if capital increase needed) | Additional fee based on capital increase |
| Total Estimated Cost | 15,000-30,000 rupees |
Common Mistakes to Avoid
- Missing the 6-month mandatory deadline: If your OPC breaches the threshold, start the conversion process immediately. Do not wait until the last month - Form INC-6 filing and ROC processing take time
- Not planning the share structure: Decide the share allotment before filing. Changing share structure later requires additional filings, resolutions, and expenses
- Forgetting to alter the MOA and AOA: The ROC will reject Form INC-6 if the altered MOA and AOA are not attached. Ensure all OPC-specific clauses are removed
- Not obtaining creditor NOC: While not always mandatory, failing to obtain creditor NOC or provide a self-declaration can delay the ROC approval
- Delaying Form PAS-3 filing: The Return of Allotment must be filed within 15 days of share allotment. Late filing attracts penalties
- Not updating compliance calendar: After conversion, the company must follow full Private Limited compliance requirements including 4 Board Meetings per year and an AGM. Set up reminders immediately
Conclusion
Converting an OPC to a Private Limited Company is a natural progression for growing businesses. Whether the conversion is triggered by mandatory thresholds (50 lakh paid-up capital or 2 crore turnover) or by voluntary choice to bring in partners and investors, the process is structured and well-defined through Form INC-6 on the MCA portal.
The conversion preserves the company's legal identity - the same PAN, tax history, contracts, and bank accounts continue. The primary tasks are bringing in new shareholders and directors, altering the MOA and AOA, and transitioning to full Private Limited Company compliance. With proper planning and professional assistance, the conversion can be completed in 15-30 working days at a cost of 15,000-30,000 rupees.
If you need assistance with the complete conversion process - from threshold analysis and Form INC-6 filing to share allotment, director appointments, and post-conversion compliance setup - the IncorpX team handles every step professionally.
Frequently Asked Questions
What is a One Person Company (OPC)?
A One Person Company is a type of company under Section 2(62) of the Companies Act 2013 that allows a single individual to incorporate and operate a company with limited liability. An OPC has only one member (shareholder) and can have 1 to 15 directors. It must nominate a person (nominee) who becomes the member in case of death or incapacity of the sole member. OPCs were introduced to encourage sole entrepreneurs to operate in a formal corporate structure.
When is OPC to Private Limited conversion mandatory?
Conversion is mandatory when the OPC exceeds either of these thresholds: paid-up share capital exceeding 50 lakh rupees, or average annual turnover of the immediately preceding 3 consecutive financial years exceeding 2 crore rupees. If either threshold is breached, the OPC must convert within 6 months from the date of breach. Failure to convert within the timeline attracts penalties under the Companies Act.
Can I voluntarily convert an OPC to a Private Limited Company?
Yes, you can voluntarily convert even if the mandatory thresholds are not breached. The only condition is that the OPC must have been incorporated for at least 2 years before voluntary conversion. This allows entrepreneurs who incorporated as an OPC but now want to bring in partners, investors, or scale up to convert to a Private Limited Company structure.
What is Form INC-6?
Form INC-6 is the prescribed form on the MCA portal for converting an OPC into a Private Limited Company or Public Limited Company. It contains details of the OPC (CIN, name, registered office), details of the proposed conversion (new structure, additional shareholders and directors), and requires attachment of supporting documents including the Board Resolution, altered MOA and AOA, consent of new directors, and creditor NOC.
What documents are needed for Form INC-6?
The following documents are typically attached: Board Resolution approving conversion, Member's Special Resolution (for voluntary conversion), altered MOA and AOA with Private Limited Company provisions, Form DIR-2 (consent of new directors), Form INC-9 (declaration by directors and subscribers), NOC from creditors or self-declaration, audited financial statements, list of proposed members and directors, and proof of registered office address.
How many shareholders and directors does a Private Limited Company need?
A Private Limited Company requires a minimum of 2 shareholders and a minimum of 2 directors. At least one director must be a resident of India (stayed in India for 182 or more days in the previous calendar year). Since an OPC has only 1 member, you need to bring in at least 1 more shareholder and potentially 1 more director (if you only had 1 director in the OPC).
What happens to the OPC's nominee after conversion?
The nominee mechanism is specific to OPCs and ceases to apply after conversion to a Private Limited Company. The nominee can choose to become a shareholder or director of the new Private Limited Company, or they can simply be removed from the records. A Private Limited Company does not require a nominee designation since it has multiple shareholders and the concept of succession is handled through shareholding and will.
How long does the conversion process take?
The entire conversion typically takes 15 to 30 working days. The breakdown is: preparation of Board and Special Resolutions, amended MOA/AOA, and other documents (5-7 days), filing Form INC-6 and ROC processing (7-15 working days), post-conversion filings like PAS-3 and DIR-12 (5-7 days), and updation of bank accounts, GST, and other registrations (7-10 days). ROC processing time varies by office workload.
What is the government fee for Form INC-6?
The government fee for filing Form INC-6 depends on the authorized share capital of the company. For authorized capital up to 1 lakh rupees, the fee is 200 rupees. For higher authorized capital, the fees increase progressively. Additionally, if you are increasing the authorized capital as part of the conversion, fees for Form SH-7 also apply. Professional fees for CA/CS assistance typically range from 8,000 to 20,000 rupees.
Do I need to change the MOA and AOA during conversion?
Yes, the MOA and AOA must be altered to remove OPC-specific provisions. Key changes include: removing the nominee clause, removing the restriction on number of members (OPC can have only 1), updating the subscribers page to include all shareholders, removing the exemption from holding general meetings, removing the exemption from maintaining minutes of Board meetings (OPC with 1 director was exempt from certain provisions), and ensuring the AOA conforms to Table F of Schedule I applicable to Private Limited Companies.
Will the CIN (Corporate Identity Number) change after conversion?
The CIN will change partially. The CIN prefix changes from 'U' for OPC to appropriate codes for Private Limited Company, and the type code changes. However, the ROC registration number component remains the same. The ROC issues an altered Certificate of Incorporation with the new CIN. You must update the new CIN across all registrations, bank accounts, contracts, and stationery.
What about the OPC's PAN and TAN?
The PAN and TAN remain the same after conversion since the company's legal identity continues - it is the same company changing its type, not a new company being formed. You do not need to apply for a new PAN or TAN. However, update the company name and type on the PAN records through the NSDL/UTIITSL portal if the name changes. Update TAN records as well if any details change.
How does the conversion affect existing bank accounts?
Since the company's legal identity continues (same PAN, same entity), bank accounts do not need to be closed and reopened. However, you must update the bank records to reflect: the change in company type (from OPC to Pvt Ltd), addition of new authorized signatories if needed, updated Board Resolution for banking operations, and the altered Certificate of Incorporation. Visit the bank with the new certificate and updated Board Resolution.
What happens to existing GST registration?
The GST registration continues without cancellation since the underlying PAN remains the same. However, you must file an amendment application on the GST portal to update the entity type from 'OPC' to 'Private Limited Company', update the trade name if changed, and add any new authorized signatories. This is a non-core amendment that can be done online without visiting the GST office.
Is there any tax implication of OPC to Private Limited conversion?
The conversion is tax-neutral. Since the OPC continues as the same legal entity (just changing its type), there is no transfer of assets or business. The PAN remains the same, the company's financial history continues, and there are no capital gains implications. Income tax returns are filed under the same PAN. The company continues to enjoy the same tax assessments, brought-forward losses, and depreciation schedules.
What shares are allotted to the new shareholders?
The new shareholders receive shares through fresh allotment. The Board Resolution approving conversion should also approve the allotment of shares to new members. The shares can be allotted at face value or at a premium depending on the company's valuation. After allotment, file Form PAS-3 (Return of Allotment) with the ROC within 15 days. The new shareholders' details are then reflected in the company's register of members.
Do I need to increase the authorized capital?
Not necessarily. If the OPC's existing authorized capital is sufficient to accommodate the shares being allotted to new shareholders, no increase is needed. However, if the authorized capital needs to be increased, file Form SH-7 (Notice to Registrar of any alteration of share capital) along with a Special Resolution. Fees for Form SH-7 depend on the amount of increase. Plan the share allotment structure to minimize additional fees.
What is the penalty for not converting within the mandatory timeline?
If an OPC breaches the mandatory threshold and does not convert within 6 months, the company and its officers are liable for penalties under the Companies Act. The OPC may face a penalty of up to 10,000 rupees, and for a continuing default, a further penalty of 1,000 rupees per day. The directors may also face personal penalties. It is strongly advisable to initiate conversion immediately upon breaching the thresholds.
Can an OPC be converted directly to a Public Limited Company?
Yes, an OPC can be converted directly to a Public Limited Company using the same Form INC-6. However, a Public Limited Company requires a minimum of 7 shareholders, 3 directors, and a minimum paid-up capital of 5 lakh rupees (though the capital threshold has been removed for most companies). Going directly to Public requires significantly more shareholders and compliance. Most OPCs convert to Private Limited first and then to Public if needed.
What changes in compliance after conversion to Private Limited?
After conversion, the company must comply with full Private Limited Company compliance requirements: 4 Board Meetings per year (instead of 2 for OPC), Annual General Meeting (OPC was exempt), filing AOC-4 (financial statements) and MGT-7A (Annual Return) with ROC, DIR-3 KYC for all directors, statutory audit regardless of turnover (OPC with turnover under 2 crore could have simplified requirements), and maintaining proper minutes of all meetings.
Can the OPC's sole director continue as a director?
Yes, the sole director of the OPC automatically continues as a director of the Private Limited Company. They do not need to resign and be reappointed. However, you need to appoint at least 1 more director to meet the minimum requirement of 2 directors. The new director must have a DIN, file Form DIR-2 (consent), and their appointment is filed through Form DIR-12 with the ROC.
What is the effect on the company's contracts and agreements?
All existing contracts, agreements, and arrangements continue without interruption. Since the company is the same legal entity changing its type, no novation, amendment, or fresh execution of contracts is required. Customer contracts, vendor agreements, employment contracts, and lease agreements all remain valid. It is good practice to inform business partners about the conversion and provide the updated Certificate of Incorporation.
How does the conversion affect company employees?
Employees are unaffected. Their employment continues without interruption since the employer entity remains the same. No changes to employment contracts, PF accounts, ESI registration, or TDS deductions are needed since the PAN remains the same. If the company name changes, update the appointment letters and HR records accordingly. Ensure continuity of all employee benefits without any break.
Can I convert an OPC if it has outstanding loans?
Yes, conversion can proceed even with outstanding loans and liabilities. However, it is advisable to obtain NOC from all creditors (banks, lenders, trade creditors) to confirm they do not object to the change in company type. If obtaining NOC from every creditor is impractical, a self-declaration by the director can be submitted stating that creditors have been informed and no objections have been received.
What is the difference between Form INC-6 and Form INC-2?
Form INC-6 is specifically for converting an existing OPC to a Private Limited or Public Limited Company. Form INC-2 (SPICe+ Form) is for incorporating a brand-new company from scratch. They serve entirely different purposes. If you already have an OPC and want to change to Private Limited, use Form INC-6. If you are starting fresh and want a new Private Limited Company, use SPICe+ (INC-32).
Can the company name change during OPC to Pvt Ltd conversion?
Yes, you can change the company name during conversion. If the OPC name included 'OPC' or 'One Person Company', it must be changed. File a name change application (Form INC-24 with RUN reservation) along with Form INC-6, or handle it as a separate filing after conversion. The altered Certificate of Incorporation will reflect the new name. A name change involves additional fees and an RUN (Reserve Unique Name) application.
What if the sole member wants to reduce their shareholding?
The sole member can allocate a portion of shares to new shareholders during conversion. This can be done through fresh allotment of new shares (if authorized capital permits) or through transfer of existing shares. If shares are transferred, a share transfer form (SH-4) is executed, and stamp duty is payable based on the share value. If new shares are allotted at a premium, the premium amount is credited to the Securities Premium Reserve.
Is a valuation required for the OPC during conversion?
A formal valuation is not legally mandated for the conversion process itself. However, a valuation is practical and recommended when allotting shares to new shareholders (especially to determine the fair premium), when new shareholders are investing money, or when the existing sole member wants to ensure they are getting fair value. A registered valuer or CA can provide a valuation report based on the company's net worth, earnings, and prospects.
What are the advantages of converting OPC to Private Limited?
Key advantages include: ability to have up to 200 shareholders (OPC allows only 1), ability to raise equity funding from angel investors, VCs, or other investors, no turnover or capital threshold restrictions, better credibility with banks and large clients, eligibility for government tenders that require Pvt Ltd structure, option to eventually convert to Public Limited for IPO, and ESOPs can be issued to attract and retain talent.
What is the timeline for mandatory conversion?
If the OPC breaches the threshold (paid-up capital exceeds 50 lakh or average turnover exceeds 2 crore), it must file Form INC-6 within 6 months from the date of breach. The 'date of breach' is the date on which the threshold is exceeded, which is typically reflected in the annual financial statements. It is important to monitor the company's turnover and paid-up capital regularly to identify the breach timeline accurately.
Can I add more than 2 shareholders during conversion?
Yes, you can add any number of shareholders during conversion, up to the maximum of 200 members allowed for a Private Limited Company. Many OPCs use the conversion as an opportunity to bring in 2-4 shareholders including family members, business partners, or early investors. Plan the share allotment structure carefully, considering ownership percentages, future funding rounds, and control over the company.
What happens to the OPC's financial statements and tax history?
All financial history continues seamlessly. The company's audited financial statements, tax returns, assessments, brought-forward losses, depreciation schedules, and advance tax payments all carry forward without any break. The tax authorities view it as the same entity with a change in company type. File income tax returns under the same PAN. No fresh assessment or reassessment is triggered by the conversion.
Do I need a Company Secretary after conversion?
A Company Secretary is mandatory for a Private Limited Company only if the paid-up share capital exceeds 5 crore rupees. For most converted OPCs, a full-time CS is not required. However, engaging a practicing Company Secretary for handling annual filings, Board Meeting compliance, and other regulatory requirements is highly recommended, especially if the promoter is not familiar with Companies Act compliance.
How does conversion affect the OPC's audit status?
After conversion, the company must undergo a statutory audit by a Chartered Accountant regardless of turnover or capital. OPCs had certain small company exemptions, but a Private Limited Company must comply with full audit requirements. The existing auditor of the OPC continues as auditor of the Private Limited Company. No fresh appointment is needed unless the auditor resigns or the shareholders wish to change the auditor.
Can an NRI or foreign national be a new shareholder or director?
Yes, NRIs and foreign nationals can be shareholders or directors of the Private Limited Company. They must comply with FEMA regulations and FDI norms. At least one director must be a resident of India. Foreign directors need a DSC from an Indian Certifying Authority, a DIN from MCA, and valid passport for KYC. If foreign nationals hold shares, the company must file the required reports with the RBI under FEMA.
What is the total cost of converting OPC to Pvt Ltd?
The total cost typically ranges from 15,000 to 30,000 rupees including: government filing fees for Form INC-6 (200-600 rupees based on capital), Form PAS-3 fees, Form DIR-12 fees, stamp duty on share allotment (varies by state), DSC for new directors (1,000-2,000 per person), and professional fees for CA/CS (8,000-20,000 rupees). If authorized capital is being increased, Form SH-7 fees are additional.
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