Private Limited to OPC Conversion: Rule 7 and INC-6
Private limited to OPC conversion is open to a company with one remaining owner. It runs under Section 18 and Rule 7 of the Companies (Incorporation) Rules, 2014. There has been no capital or turnover limit since 1 April 2021. You need written NOCs from members and creditors, a special resolution and an INC-6 application on the MCA V3 portal.
What it is
Private limited to OPC conversion changes the company’s class into a One Person Company. The company, its assets, contracts and liabilities stay the same. It suits a company where the other shareholders have exited, or are ready to exit, and one person now owns the business.
The law is Section 18 of the Companies Act, 2013, which lets a company change its class by altering its memorandum and articles, read with Rule 7 of the Companies (Incorporation) Rules, 2014. Section 18(3) keeps every existing debt, liability, obligation and contract enforceable as before. A Section 8 company cannot use this route.
Who it applies to
Companies left with one owner
A co-founder has moved on, or family members want one person to hold everything. Picture a Faridabad interiors business set up by two friends, where one has taken up a salaried job: once his shares move to the remaining founder, the company can convert.
Owners who are Indian citizens
The sole member must be a natural person and an Indian citizen. Since 2021 this includes NRIs. A person can be a member or nominee of only one OPC.
Companies outside restricted activities
An OPC cannot carry on non-banking financial activity, including investment in securities of other bodies corporate. An NBFC cannot convert.
Why it matters
Drop the AGM
An OPC holds no AGM under Section 96, files the shorter MGT-7A annual return and need not prepare a cash flow statement.
Hold fewer board meetings
An OPC needs one board meeting in each half of the calendar year, at least 90 days apart. With a single director, none at all.
Halve most penalties
Section 446B caps most penalties for an OPC at half the normal amount, up to ₹2 lakh for the company and ₹1 lakh for an officer.
Documents required
Before the resolution
- Written NOC from every member
- Written NOC from every creditor
- Share transfer deeds (SH-4) bringing shares to one person
For the meeting
- Board resolution calling the general meeting
- Notice and explanatory statement
- Altered memorandum and articles for an OPC
- Nominee’s consent in Form INC-3, with ID and address proof
For the ROC
- Certified special resolution for MGT-14
- Affidavit of directors that all members have consented
- Copies of creditors’ NOCs
- Director’s digital signature certificate
Private limited vs OPC at a glance
| Private limited company | One Person Company | |
|---|---|---|
| Members | 2 to 200 | 1, with a nominee |
| Minimum directors | 2 | 1 |
| AGM | Required | Not required |
| Board meetings | 4 a year (half-yearly if a small company) | 1 each half-year; none with one director |
| AOC-4 due | 30 days from the AGM | 180 days from year end |
| Annual return | MGT-7, or MGT-7A if small | MGT-7A |
In practice, the real question is the next three years. If a co-founder or investor is likely to join soon, the OPC would have to convert back. That is allowed at any time since 2021, but it means a second round of filings.
How it works
Bring the shareholding to one person
Other shareholders transfer their shares to the continuing owner on SH-4, with stamp duty paid, and the board registers the transfers. Here is the catch: a parent gifting shares to a child usually pays no stamp duty on a genuine gift, but the transfer still has to be documented.
Collect NOCs from members and creditors
Rule 7 wants written no-objection from members and creditors before the special resolution, not after.
Pass the special resolution
At a general meeting, members approve the conversion and the altered memorandum and articles, and the nominee is named.
File MGT-14 and INC-6
We file the resolution in MGT-14 within 30 days, then the INC-6 application with the altered documents, NOCs and directors’ affidavit on the MCA V3 portal.
Update the name and records
Once the ROC issues the fresh certificate, “One Person Company” appears below the name on letterheads and signboards, and we update the bank and GST records.
Timelines
Deliver share transfers within 60 days
Each SH-4 must be delivered to the company within 60 days of execution, so plan the transfers early.
File MGT-14 within 30 days
The special resolution is filed with the ROC within 30 days of passing it, under Section 117.
Apply in INC-6 after the resolution
The INC-6 application follows the resolution, with the altered memorandum and articles. A 2026 draft proposed merging INC-6 into a combined form. We check which form the MCA V3 portal asks for on the day we file.
What happens if you miss it
Late MGT-14 penalty
Section 117(2): ₹10,000 plus ₹100 a day, up to ₹2 lakh for the company and ₹50,000 for each officer in default.
Higher filing fees
Late event-based forms pay an additional fee of 2× the normal fee up to 30 days, rising to 12× beyond 180 days.
Rule 7 contravention
Breaching the conversion rule attracts a fine of up to ₹5,000, plus up to ₹500 for every day the breach continues.
Frequently asked questions
Is there a turnover or capital limit for converting a private company into an OPC?
No, not since 1 April 2021. Before that, a private company could convert only if its paid-up capital was ₹50 lakh or less and its average turnover ₹2 crore or less. The Companies (Incorporation) Second Amendment Rules, 2021 removed those limits. Today any private company other than a Section 8 company can convert, whatever its size, as long as it meets the other conditions of Rule 7.
Who can be the sole member of an OPC?
Only a natural person who is an Indian citizen, whether resident in India or not. A company, LLP or trust cannot be the member. Since the 2021 amendment, NRIs who are Indian citizens can also form or hold an OPC. One person can be a member of only one OPC, and a nominee of only one. If your shares are held through a holding company today, they must first move to you personally.
Do creditors need to agree to the conversion?
Yes. Rule 7 requires the company to obtain a written no-objection from its members and creditors before the special resolution is passed. Copies of the creditors’ NOCs go with the application to the ROC. If the company has a bank loan, start with that lender, as banks take the longest. Collecting every NOC upfront means the ROC has nothing to query on this point.
What is a nominee and why is one needed?
A nominee is the person who will become the OPC’s member if the sole member dies or becomes unable to contract. Section 3(1) requires the memorandum of an OPC to name one, with their prior written consent in Form INC-3. The nominee must also be a natural person and an Indian citizen. Usually it is a spouse, parent or adult child. The nominee can be changed later by a simple filing.
Does the company lose its contracts or loans on conversion?
No, the company remains the same legal person. Under Section 18(2) the ROC closes the old registration and issues a fresh certificate of incorporation for the new class. Section 18(3) keeps every debt, liability, obligation and contract enforceable as if the conversion had not happened. So bank loans, leases, GST registration and customer contracts continue. Only the name display changes, with “One Person Company” shown below it.
How many directors does the OPC need?
At least one director, under Section 149(1). The sole member can be the only director. A one-director OPC is also exempt from the board-meeting rule in Section 173, and records decisions in the minutes book instead. If the company has two or more directors, it holds at least one board meeting in each half of the calendar year, at least 90 days apart.
Can the OPC convert back into a private company later?
Yes, at any time. Since 1 April 2021, an OPC can convert into a private or public company whenever it chooses, with no two-year wait and no size trigger, after increasing its members and directors to the minimum. So the decision is reversible. If an investor joins in two years, the OPC converts back, though it means a second round of resolutions and filings.
What does an OPC file every year after conversion?
An OPC files its financial statements in AOC-4 within 180 days of the end of the financial year, which is 27 September, and its annual return in MGT-7A. The statements need an audit, but no cash flow statement. It also files its income tax return, DPT-3 where applicable and DIR-3 KYC for its directors. Late AOC-4 and MGT-7A cost ₹100 a day each, so we diarise them from day one.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
MGT-14 and INC-6 each carry a normal fee based on authorised capital, multiplied 2× to 12× if filed late. Stamp duty applies on each share transfer at 0.015% of the consideration.
Ready to begin?
Tell us who is exiting and who will hold the shares, and we will plan your private limited to OPC conversion step by step.