Proprietorship to OPC Conversion
A One Person Company keeps you the sole owner and adds limited liability. There is no direct conversion route, so we incorporate the OPC through SPICe+ and move your proprietorship into it on terms that can keep the transfer tax-neutral.
What it is
Proprietorship to OPC conversion means moving a business you run alone into a company that you still own alone. The OPC has one member, a nominee who steps in if the member dies or becomes incapable, and its own PAN and bank account.
The Companies Act, 2013 has no conversion route for a proprietorship, because a proprietorship has no legal identity separate from its owner. So the OPC is incorporated under Section 3(1)(c) through SPICe+ on the MCA V3 portal, and the business is then transferred to it in exchange for shares.
Who it applies to
Owners who want no partner
A private company or LLP needs at least two owners. An OPC needs only you, plus a nominee who holds nothing while you are alive. Think of a Faridabad packaging supplier whose family is not in the business.
Indian citizens resident in India
The member must be a natural person and an Indian citizen. Since 1 April 2021, NRIs who are Indian citizens can also form an OPC, and the residency test is a stay of 120 days.
Businesses that are not NBFCs
Traders, manufacturers and service providers. An OPC cannot do non-banking financial or investment business.
Why it matters
Cap your risk, keep control
Your liability is limited to the unpaid amount on your shares. You still take every decision, with no partner’s consent needed.
Show lenders a company record
An OPC has audited accounts and a public MCA record, which lenders and large buyers ask to see.
Grow into a private company
Since 1 April 2021, an OPC can convert into a private or public company at any time. When you take on investors, the structure is already in place.
Documents required
For the OPC
- PAN, Aadhaar and photo of the member
- Nominee’s PAN, Aadhaar and consent in Form INC-3
- Office proof: utility bill under two months old, plus rent agreement or owner’s NOC
- DSC of the director
From the proprietorship
- Balance sheet on the transfer date
- GST certificate and latest returns
- List of assets, liabilities, debtors and creditors
For the transfer
- Business transfer agreement, duly stamped
- Registered valuer’s report, for shares issued against the business
- CA certificate for GST ITC-02
OPC, private limited or LLP?
| OPC | Private limited | LLP | |
|---|---|---|---|
| Owners | 1 member + nominee | At least 2 | At least 2 partners |
| Tax-neutral transfer from a proprietorship | Yes, if the conditions are met | Yes, if the conditions are met | No specific exemption |
| AGM | Not required | Required | Not required |
| Audit | Every year | Every year | Above ₹40 lakh turnover or ₹25 lakh contribution |
If someone else will own shares from day one, see our page on converting a proprietorship to a private limited company. If you want to keep 100%, proprietorship to OPC conversion is the closest fit.
How it works
Choose the nominee and the transfer date
We confirm eligibility, take the nominee’s consent and fix a takeover date.
Incorporate the OPC through SPICe+
We reserve the name in SPICe+ Part A and file Part B with the e-MoA, e-AoA and AGILE-PRO-S. PAN and TAN come with the certificate of incorporation. See One Person Company registration for details.
Transfer the business for shares
The proprietor and the OPC sign a business transfer agreement. The OPC allots shares to you against the net assets, backed by a registered valuer’s report, and files PAS-3 within 30 days. In practice, this is the step that decides the tax result.
Move GST and close the old registrations
The OPC takes a fresh GSTIN. We file GST ITC-02 to carry unused credit, cancel the old GSTIN in REG-16 and file the final return. Udyam, IEC and licences move to the OPC’s PAN.
File INC-20A and start the OPC calendar
The commencement declaration in INC-20A is due within 180 days of incorporation. We also appoint the first auditor within 30 days and set up the annual filings.
Timelines
Incorporate in 7–15 working days
Usually 7 to 15 working days from complete documents.
Finish the first-180-day filings
First auditor and PAS-3 within 30 days; INC-20A within 180 days. Under Section 10A, the OPC cannot do business or borrow until INC-20A is filed.
File every year after
AOC-4 within 180 days of the financial year-end, that is, by 27 September, and MGT-7A by 29 November.
What happens if the conditions are broken
The tax exemption is withdrawn
Here is the catch. The exemption needs all business assets and liabilities to move, shares as the only consideration, and your holding at 50% or more for five years. Break any condition and the gain is taxed in the OPC’s hands in that year under Section 71 of the Income-tax Act, 2025.
Late ROC forms cost ₹100 a day
AOC-4 and MGT-7A filed late attract ₹100 per day each, with no cap. CCFS-2026 has ended. Section 446B halves penalties, not the daily fee.
Old GST dues follow you
Under Section 85 of the CGST Act, you and the OPC are jointly and severally liable for GST dues up to the transfer date. Cancelling the old GSTIN does not end a pending notice.
Frequently asked questions
Can a proprietorship be converted directly into an OPC?
No. Section 366 of the Companies Act lets partnership firms, LLPs and other registered entities become companies, but a proprietorship has no separate legal identity to convert. You incorporate a new OPC through SPICe+ and transfer the business to it. Customers, stock and staff move over on the agreed date.
Is the transfer of my proprietorship to an OPC tax-free?
It can be. Section 70(1) of the Income-tax Act, 2025, which replaced Section 47(xiv) from 1 April 2026, exempts the transfer if all business assets and liabilities pass to the company, you receive only shares, and you hold at least 50% of the voting power for five years. In an OPC you hold 100%, so the main care is not selling down early.
Who can be the nominee of an OPC?
A natural person who is an Indian citizen and gives written consent in Form INC-3. The nominee becomes the member only if you die or become incapable of contracting. A person can be a member or nominee of only one OPC. You can change the nominee later with the nominee’s consent and an ROC filing. Owners often choose a spouse, parent or adult child.
Can my OPC keep the proprietorship’s business name?
Yes, if the MCA approves it in SPICe+ Part A as not identical or too similar to an existing company, LLP or registered trademark. The words “One Person Company” must also appear below the name wherever it is used. If your trade name is a registered trademark, assign it to the OPC in Form TM-P so the brand moves with the business.
What happens to my GST registration?
The OPC has a new PAN, so it takes a fresh GSTIN within 30 days of becoming liable. Unused input tax credit moves through Form GST ITC-02 with a certificate from a practising chartered accountant or cost accountant. The old GSTIN is then cancelled in REG-16 and the final return filed within three months. A transfer as a going concern is exempt from GST.
What are an OPC’s yearly compliances?
An annual audit, AOC-4 within 180 days of the year-end (27 September), MGT-7A by 29 November and ITR-6. An OPC holds no AGM; resolutions are entered in the minutes book. With one director, no board meetings are required; with two or more, one meeting in each half of the calendar year is enough. You keep full control with far less paperwork than a private company.
Can I convert the OPC into a private limited company later?
Yes, at any time. Since 1 April 2021 there is no turnover or capital limit forcing conversion and no two-year waiting period. You add at least one more member and director, alter the memorandum and articles, and file the conversion with the ROC. Starting as an OPC closes no doors.
How long does the whole move take?
About 7 to 15 working days for incorporation, then a few weeks for the share allotment, GST, bank and licence changes. PAS-3 is due within 30 days of allotment and INC-20A within 180 days of incorporation. With documents ready on day one, most owners complete the switch within two months.
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.
Government charges: name reservation ₹1,000; no SPICe+ filing fee for authorised capital up to ₹15 lakh; no fee for PAN and TAN. Stamp duty on the MoA, AoA and transfer agreement depends on the state.
Ready to begin?
Tell us your nominee and takeover date. Our proprietorship to OPC conversion service moves your business across with the tax conditions protected.