[FAQs] on Company Conversion Types – Private | Public | Section 8 | OPC | LLP

As per Section 13 of the Companies Act, 2013, approval of the Central Government is not necessary if the change relates to the addition or deletion of the word ‘Private’ to the name of the company consequent to the conversion of a private company into a public company and vice versa.

Alteration of Articles for conversion of private company to public company and vice versa [Section 14]: Subject to the provisions of the Act and the conditions contained in its memorandum, a company may, by a special resolution, alter its Articles including alterations having the effect of conversion of –

• Private company into a public company or
• Public company into a private

Where a company being a private company alters its articles in such a manner that it no longer include the restrictions and limitations which are required to be included in the articles of a private company, the company shall, as from the date of such alteration, cease to be a private company.

Central Government approval:  Any alteration having the effect of conversion of a public company into a private company shall not be valid unless it is approved by an order of the Central Government on an application made in such form and manner as may be prescribed.

Filing with ROC: Every alteration of the articles and a copy of the order of the Central Government approving the alteration shall be filed with the Registrar, together with a printed copy of the altered articles, within a period of 15 days in such manner as may be prescribed, who shall register the same.

Conversion of companies already registered [Section 18]:

• Conversion: A company of any class registered under the Act may convert itself as a company of other class by alteration of MOA and AOA of the Company.
• Issue of new certificate of registration: Where the conversion is required, the Registrar shall on an application made by the company, after satisfying that the required provisions have been complied with, close the former registration of the company and after registering the documents, issue a certificate of incorporation in the same manner as its first registration.
• Effect of conversion: The registration of a company shall not affect any debts, liabilities, obligations or contracts incurred or entered into, by or on behalf of the company before conversion and such debts, liabilities, obligations and contracts may be enforced in the manner as if such registration had not been done.

Procedure for conversion of private company into a public company: Following procedure for conversion of a private company into a public company is applicable:

• Board meeting: Convene a Board Meeting to take necessary decisions to fix the time, place and agenda for convening a General Meeting of members. Also authorize Company Secretary or Director of the company to issue notice of the meeting.
• Notice of general meeting: Issue Notice at least 21 clear days of the General meeting to all Members, Directors and Auditors of the company in accordance with the provisions of Section 101. Notice shall specify the day, date, time and full address of the venue of the General Meeting and must contain a statement on the business to be transacted at such meeting.
• Holding of General Meeting & passing of resolutions:

1. 1. Hold the General meeting as scheduled and pass the necessary special resolutions.
   2. Pass special resolution to amend the Name Clause in the MOA by removing the word ‘Private’.
   3. Pass a special resolution deleting from its articles the restricting clauses of a private Similarly, all other clauses in the articles which applies to a private company should be deleted and those which apply to public companies should be inserted such as increasing the number of shareholders to at least 7 and number of directors to at least 3.

These resolutions will be passed clause by clause.

• Filing with ROC:

1. 1. File Form MGT-14 with ROC for passing special resolution within 30 days.
   2. For effecting the conversion of a private company into a public company, the application shall be filed in Form INC-27 with prescribed fee.

• Registration of documents by ROC: On receipt of the order, the documents will be filed with the ROC along with a copy of the revised Articles and the ROC will register the
• On registration by the ROC the process will be completed.

As per Section 2(68), a private company means a company, which has a minimum paid-up capital as may be prescribed, and by its articles:

• Restricts the right to transfer its shares;
• Limits the number of its members to 200 excluding past and present employee;
• Prohibits any invitation to the public to subscribe for any security.

Note: Joint holder of shares should be treated as a single member. The words ‘Private Ltd.’ must be added at the end of its name by a private limited company.

In given case, the existing members will be counted as follows to convert into a private company.

Since the numbers of members are below 200 there is no need to reduce the number of members.

Procedure for conversion of public company into a private company: Following procedure for conversion of a public company into a private company is applicable:

• Board Meeting: Convene a Board Meeting to take necessary decision to fix the time, place and agenda for convening a General Meeting of members. Also authorize Company Secretary or Director of the company to issue notice of the meeting.
• Notice of general meeting: Issue Notice at least 21 clear days of the General meeting to all Members, Directors and Auditors of the company in accordance with the provisions of Section 101. Notice shall specify the day, date, time and full address of the venue of the General Meeting and must contain a statement on the business to be transacted at such meeting.
• Holding of General Meeting & passing of resolutions:

1. 1. Hold the General meeting as scheduled and pass the necessary special resolutions.
   2. Pass special resolution to amend the Name Clause in the MOA by removing the word ‘Public’.
   3. Pass a special resolution inserting in articles the restricting clauses of a private company. Similarly, all other clauses in the articles which do apply to a private company should be added such as limiting the number of shareholders to 200 and those which apply to public companies should be deleted.

These resolutions will be passed clause by clause

• Filing with ROC: File Form MGT-14 with ROC for passing special resolution within 30 days.
• Publication of an Advertisement: The Company shall, at least 21 days before the date of filing of the application with Regional Director must advertise an application for conversion of public limited company into private limited company in a vernacular newspaper widely circulated in the district, and in English newspaper, which is circulated widely in the State in which the Registered Office of the Company is situated. The application should be advertised in Form INC-25A.
• Application to Regional Director: The Company must draft an application for the conversion of Public Company into Private Company and file the same with the Regional Director within sixty days from the date of passing of Special Resolution in Form RD-1 along with the prescribed fee.
• Registration of documents by ROC: On receipt of the order of the Regional Director documents will be filed with the Registrar along with a copy of the revised Articles and the Registrar will register the same.
• On registration by the Registrar the process will be complete.

Pre-conditions to be examined for conversion of a public company into a private company are as under:

1. Members to be reduced below 200 (presently 220)
2. Public deposits to be repaid in full (presently ₹ 5 Crore)
3. Shareholders deposits/loan should not exceed 100% of paid-up capital and free reserves and share premium (presently ₹ 3 Crore).

In this case, the company has a paid-up capital of ₹ 1 Crore and free reserves of ₹ 1 Crore i.e. total of ₹ 2 Crore which is the maximum limit of exempted deposit from shareholder for private limited company. Hence, ₹ 1 Crore needs to be repaid to shareholders before conversion.

According to sections 13 and 14 of the Companies Act, 2013 read with Rule 33 and Rule 41 of the Companies (Incorporation) Rules, 2014, a public company can be converted into the private company only after obtaining its shareholders approval by way of passing a special resolution in general meeting.

Post Conversion requirements to be arranged by the company: Once the company gets converted into private limited company, it needs to intimate and inform some authorities, persons as required by law. Following are the major compliance that needs to be followed by the company after conversion:

• Arrange new rubber stamps with the new name, and all the stationary in the new name of the Company.
• Arrange printing of fresh copies of Altered Memorandum of Association and Articles of Association with new Certificate of Incorporation.
• Paint the new name of the Company outside every office, building etc. along with former name so changed.
• Get the new name printed on its business letters, letter heads, Bill heads, Invoice Forms, Receipt Forms and all other official publications along with former name so changed.
• Inform about the conversion of the Company to all concerned persons/govt. authorities.
• Intimate all the Banks where Company is operating Bank Accounts about its conversion and file necessary applications and documents with regard to change in the name of Account holder.
• Make application to Income Tax Department for new Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).

Restriction of alteration of MOA and conversion into other companies [Section 8(4)]: A company registered under section 8 shall not alter the provisions of its memorandum or articles except with the previous approval of the Central Government. [These powers have been delegated to Regional Directors]

A company registered under section 8 may convert itself into company of any other kind only after complying with prescribed conditions as may be prescribed.

Section 8 company cannot be converted to One Person Company (OPC).

Conditions for conversion of a company registered under section 8 company of any other kind [Rule 21 of the Companies (Incorporation) Rules, 2014]:

• A company registered under section 8 which intends to convert itself into a company of any other kind shall pass a special resolution at a general meeting for approving such conversion. The explanatory statement annexed to the notice convening the general meeting shall set out in detail the reasons for opting for such conversion.
• A certified true copy of the special resolution along with a copy of the Notice convening the meeting including the explanatory statement shall be filed with the Registrar in Form MGT-14 along with the fee.
• The company shall file an application in Form INC-18 with the Regional Director with the fee along with a certified true copy of the special resolution and a copy of the Notice convening the meeting including the explanatory statement for approval for converting itself into a company of any other kind and the company shall also attach the proof of serving of the notice served to all the authorities mentioned in Rule 22(2).
• A copy of the application with annexure as filed with the Regional Director shall also be filed with the Registrar.

Procedure for conversion of section 8 company into normal public company: Following procedure for conversion of section 8 company into normal public company is applicable:

• Board Meeting: Convene a Board Meeting to take necessary decision to fix the time, place and agenda for convening a General Meeting of members. Also authorize Company Secretary or Director of the company to issue notice of the meeting.
• Notice of general meeting: Issue Notice at least 14 clear days of the General meeting to all Members, Directors and the Auditors of the company in accordance with the provisions of Section 101. Notice shall specify the day, date, time and full address of the venue of the General Meeting and must contain a statement on the business to be transacted at such meeting.
• Holding of General Meeting & passing of resolutions:

1. 1. Hold the General meeting as scheduled and pass the necessary special resolutions.
   2. Pass special resolution to amend the Name Clause in the MOA by adding the word ‘Ltd.’.
   3. Pass a special resolution as required by section 14 for altering various clause of MOA. Similarly, all other clauses in the articles which are applicable for section 8 company should be deleted and new clauses applicable to normal public company should be added.
      These resolutions will be passed clause by clause.

• Filing with ROC: File Form MGT-14 with ROC for passing special resolution within 30 days.
• Application to Regional Director: The company shall file an application in Form INC.18 with the Regional Director with the fee along with a certified true copy of the special resolution and a copy of the Notice convening the meeting including the explanatory statement for approval.
• Publication of an Advertisement: The company shall, within a week from the date of submitting the application to the Regional Director, publish a notice in Form INC-19 in vernacular newspaper and in English newspaper of the district in which the registered office of the company is situated and on the website of the company, if any.
• Registration of documents by ROC: The Company shall thereafter file with the Registrar a certified copy of the approval of the Regional Director within 30 days from the date of receipt of the order in Form INC-20 along with a copy of the amended MOA and AOA and the Registrar will register the
• On registration by the Registrar the process will be complete.

Conversion of One Person Company (OPC) into a Public or Private Company is governed by Sections 18 & 122 of the Companies Act, 2013 read with Rule 6 of Companies (Incorporation) Rules of 2014.

OPC cannot be converted in Section 8 Company.

Voluntarily Conversion: OPC can convert itself voluntarily into private company or public company as per section 18 of the Companies Act, 2013.

Alteration of MOA & AOA: The One Person Company shall alter its memorandum and articles by passing a resolution in accordance with Section 122(3) to give effect to the conversion and to make necessary changes incidental thereto.

Following matters will be considered while giving effect to conversion procedure:

• Alteration of name of company deleting words “One Person Company” and adding the words “Private Company” in MOA &
• Deleting the clauses of MOA & AOA applicable to OPC and adding the various clauses that are applicable to private
• Increasing the number of member to two (in case of private company) and seven (in case of public company).
• Increasing the number of directors to two (in case of private company) and three (in case of public company).

Procedure for conversion of OPC into private or public company:

• Board Meeting: Convene a Board Meeting to consider the proposal for converting One Person Company into Other Company and to pass necessary resolutions as required by section 122(4).
• Passing of resolutions: In case of OPC necessary resolutions for amending MOA & AOA will be passed as specified in section 122(4).
  [As per Section 122(4), for the purposes of section 114 (passing of ordinary & special resolution), any business which is required to be transacted at AGM or other general meeting of a company by means of an ordinary or special resolution, it shall be sufficient if, in case of OPC, the resolution is communicated by the member to the company and entered in the minutes-book required to be maintained under section 118 (minutes of meeting) and signed and dated by the member and such date shall be deemed to be the date of the meeting for all the purposes under the Act. Thus, in case of OPC, the resolution required to be passed at general meeting shall be deemed to be passed if the resolution is agreed upon by the sole member and communicated to the company and entered in minute book. The resolution shall be effective from the date of signing such minutes.]
• Filing with ROC:

1. 1. File Form MGT-14 with ROC for passing special resolution within 30 days.
   2. File an application in Form INC-6 within 30 days of passing special resolution for its conversion into OPC along with prescribed fee attaching necessary documents.

• Registration of documents by ROC: On receipt of the documents if the Registrar get satisfy regarding compliance of prescribed procedure he shall register the documents and issue the fresh Certificate of Incorporation.

Provisions relating to Conversion of Private Company into OPC: Legal Provisions related to Conversion of Private Company into One Person Company are given in Section 18 of the Companies Act, 2013 read with Rule 7 of the Companies (Incorporation) Rules, 2014.

Procedure for conversion of private company into OPC:

• Notice of board meeting: Issue notice of board meeting to consider proposal of converting the private company into OPC.
• Board Meeting: In Board Meeting necessary decision will be taken regarding time, place and agenda for convening a General Meeting of members and issue of notice along with explanatory statement.
• NOC from creditors: No objection certificate will be obtained from members and creditors for converting private company into OPC.
• General meeting and special resolution: On the appointed date General Meeting will be held and special resolution will be passed considering following matters:

1. 1. Change of name by deleting words “Private Company” and adding the words “One Person Company”.
   2. Altering the clauses of MOA and AOA relating to private company and inserting the various clauses that are applicable to OPC.

• Filing of Forms with ROC:

1. 1. File Form MGT-14 with ROC for passing special resolution within 30 Days.
   2. File an application in Form INC-6 within 30 days of passing special resolution for its conversion into OPC along with prescribed fee attaching necessary documents.

• Registration & issue of fresh certificate of incorporation:  On receipt of the documents if the Registrar is satisfied regarding compliance of prescribed procedure he shall register the documents and issue the fresh Certificate of Incorporation.

Conversion of private company into One Person Company is governed by Section 18 of the Companies Act, 2013 read with Rule 7 of the Companies (Incorporation) Rules, 2014.

Penalty as per Rules: As per Rule 7A of the Companies (Incorporation) Rules, 2014, if a One Person Company (OPC) or any officer of such company contravenes the provisions with respect to conversion, the OPC or any other Officer of such company shall be punishable with fine which may extend to ₹ 5,000 and with a further fine which may extend to ₹ 500 per day after first offence, during which such contravention continues.

Penalty as per  Act:  Section 18 of the Companies Act, 2013 does not prescribe any penal provision for contravention and hence, the provisions of Section 450 related to punishment where no specific penalty or punishment is provided may be applicable in case of defaults related to conversion of Private Company into One Person Company.

As per Section 450, if a company or any officer of a company or any other person contravenes any of the provisions of the Act or the rules made thereunder, the company and every officer of the company who is in default or such other person shall be liable to a penalty of ₹ 10,000, and in case of continuing contravention, with a further penalty of ₹ 1,000 for each day after the first during which the contravention continue, subject to a maximum of ₹ 2 lakh in case of a company and ₹ 50,000 in case of an officer who is in default or any other person.

Forms and attachments that are required to be files with ROC for conversion of Private Company into OPC:

Filing of Form MGT-14: In case of conversion of Company into One Person Company Special resolution is required to be passed under section 14 of the Companies Act, 2013. Accordingly as per section 117(3)(a), a copy of special resolution is required to be filed with concerned ROC through filing of Form MGT-14 within 30 days of passing special resolution in the general meeting. Following documents are required to be attached with Form MGT-14:

• Notice of general meeting along with copy of explanatory statement under section 102.
• Certified true copy of special resolution.
• Altered memorandum of association.
• Altered articles of association.
• Certified true copy of board resolution may be attached as an optional attachment.

Filing of Form INC-6: The application for the conversion of Private Company into OPC should be filed to the ROC in Form INC-6 with following attachments:

• List of members and creditors.
• Latest Audited Balance Sheet and the Profit and Loss Account.
• Copy of No Objection Letter from shareholders and creditors.

Often a business is started as a Partnership Firm or LLP. If business grows, partners may decide to convert it into Company.

As per Section 366 of the Companies Act, 2013 any partnership firm, limited liability partnership, cooperative society, society or any other business entity formed under any other law for the time being in force can convert itself into Company.

Certificate of Registration [Section 367]: On compliance with the requirements with respect to registration, and on payment of prescribed fees, the Registrar shall certify under his hand that the Firm, LLP, Society applying for registration is incorporated as a company under the Act, and in the case of a limited company that it is limited and thereupon the company shall be so incorporated.

Vesting of property on registration [Section 368]: On conversion all property, movable and immovable, belonging to or vested in Firm, LLP, Society at the date of its registration, shall, on such registration, pass to and vest in the company as incorporated under the Act for all the estate and interest of the company therein.

Saving of existing liabilities  [Section  369]: The registration of a company shall not affect its rights or liabilities in respect of any debt or obligation incurred, or any contract entered into, by, to, with, or on behalf of, the Firm, LLP, Society before registration.

Continuation of Pending Legal Proceedings [Section 370]: All suits and other legal proceedings taken by or against the Firm, LLP, Society, which are pending at the time of the registration as a company, may be continued in the same manner as if the registration had not taken place.

Obligations of Firm/LLP/Society Registering as Company [Section 374]: Every Firm/LLP/Society which is seeking registration as a Company shall –

• Ensure that secured creditors of the company, prior to its registration, have either consented to or have given their no objection to convert Firm/LLP/ Society into company.
• Publish in a newspaper, advertisement one in English and one in vernacular language in such form as may be prescribed giving notice about registration, seeking objections and address them suitably.
• file an affidavit, duly notarized, from all the members or partners to provide that in the event of registration, necessary documents or papers shall be submitted to the registering or other authority with which the Firm/LLP/ Society was earlier registered, for its dissolution as partnership firm, LLP, cooperative society, society or any other business entity, as the case may be.
• Comply with prescribed other conditions.

However, upon registration as a company LLP incorporated under the Limited Liability Partnership Act, 2008 shall be deemed to have been dissolved under that Act without any further act or deed.

A Private Company may convert itself into LLP by complying with the provisions of Section 56 read with Schedule III of the LLP Act, 2008. These provisions are discussed below:

Conversion from private company into limited liability partnership  [Section 56]: A private company may convert into LLP in accordance with the provisions of Chapter X of the LLP Act and the Third Schedule.

Provisions of Third Schedule:

Eligibility for conversion of private companies into limited liability partnership:

1. A company may convert into LLP by complying with the requirements as to the conversion set out in the Schedule.
2. A company may apply to convert into LLP in accordance with the Schedule if and only if –

• • there is no security interest in its assets subsisting or in force at the time of application; and
  • the partners of the LLP to which it converts comprise all the shareholders of the company and no one else.
  • Upon such conversion, the company, its shareholders, the LLP into which the company has converted and the partners of that LLP shall be bound by the provisions of the Schedule that are applicable to them.

Statements to be filed: A company may apply to convert into LLP by filing with the Registrar –

• A statement by all its shareholders in such form and manner to be accompanied by such fees as the Central Government may prescribe, containing the following particulars, namely:

1. 1. the name and registration number of the company;
   2. the date on which the company was incorporated; and

• Incorporation document and statement referred to in Section 11.

Registration of conversion: On receiving the documents for conversion, the Registrar shall, register the documents and issue a certificate of registration in such form as the Registrar may determine stating that the LLP is, on and from the date specified in the certificate, registered under the Act.

The LLP shall, within 15 days of the date of registration, inform the concerned Registrar of Companies with which it was registered about the conversion and of the particulars of the LLP in such form and manner as the Central Government may prescribe.

Registrar may refuse to register: If the Registrar is not satisfied with the particulars or other information furnished for conversion of Company into LLP he may refuse to register the same. However, an appeal may be made before the Tribunal in case of refusal of registration by the Registrar.

Effect of registration: On and from the date of registration specified in the certificate of registration –

• there shall be a limited liability partnership by the name specified in the certificate of registration registered under the Act;
• all tangible (movable or immovable) and intangible property vested in the company, all assets, interests, rights, privileges, liabilities, obligations relating to the company and the whole of the undertaking of the company shall be transferred to and shall vest in the limited liability partnership without further assurance, act or deed; and
• the company shall be deemed to be dissolved and removed from the records of the Registrar of Companies.

Only Private Company and Unlisted Public Company can be directly converted into LLP by complying with the provisions of the LLP Act, 2008.

Procedure for conversion of Company into LLP:

• Board meeting: Convene a Board Meeting to take necessary decisions to fix the time, place and agenda for convening a General Meeting of members. Also authorize Company Secretary or Director of the company to issue notice of the meeting
• NOC from creditors: Obtain no objection certificate from creditors of the company for conversion into LLP
• Name Availability: Confirm availability of proposed name of LLP on MCA site.
• LLP Agreement: Draft of LLP agreement considering provisions of the Schedule I of the LLP Act, It is not necessary to have the LLP Agreement signed at the time of incorporation, as the details of the same can be filed in Form No. 3 within 30 days of incorporation/conversion.
• Filing with ROC: File Form FiLLiP with ROC along with following attachments:

1. 1. Proof of Address of Registered office of LLP.
   2. Subscription sheet signed by the promoters. (Notice of Consent & Appointment of Designated Partners with their personal details)
   3. Detail of partner/designated partner of LLP

• Attachments to application for conversion: File application for conversion in Form 18 with following attachments:

1. 1. Statement of shareholders.
   2. Incorporation Documents & Subscribers Statements in Form No. 2.
   3. Statement of Assets and Liabilities of the company duly certified as true and correct by the auditor.
   4. NOC from Income Tax authorities and Copy of acknowledgement of latest income tax return.
   5. Approval from any other body/authority as may be required.
   6. Particulars of pending proceedings from any Court/Tribunal etc.

• Certificate of Incorporation: If all documents filed and information provided is found to be in order and Registrar is satisfied that all procedural compliance is duly complied, he will issue certificate of registration.
• Conclusive evidence: The Certificate of Registration issued shall be the conclusive evidence of conversion of the LLP.

Relevant provisions for converting LLP  into  Private  Company:  As per  Rule 3 of the Companies (Authorized to Registered) Rules, 2014, for the purposes of Section 366(2) of the Companies Act, 2013, the provision of Chapter II of the Act relating to incorporation of company and matters incidental thereto shall be applicable mutatis mutandis for such registration.

There shall be two or more members for the purposes of registration of a company. A company with less than seven members shall register as a private company.

Documents & information required to be filed with ROC: A company shall attach and provide the required documents and information to the Registrar along with Form URC-1 in the following manner:

1. Details of partners who are becoming shareholders of the company:  A  list showing the names, addresses, and occupations of all persons named therein as partners with details of shares held by them respectively, showing separately shares allotted for consideration in cash and for consideration other than cash along with the source of consideration and distinguishing, in cases where the shares are numbered, each share by its number, who on a day, not being more than 6 clear days before the day of seeking registration, were partners of the LLP or firm as the case may be.
2. Details of first directors: A list showing the particulars of persons proposed as the first directors of the company, along with DIN, passport number, if any, with expiry date, residential addresses and their interests in other firm or body corporate along with their consent to act as directors of the company;
3. Details of Firm: In case of a firm, deed of partnership, bye-laws or other instrument constituting or regulating the firm and in case the deed of partnership was revised at any time in the past, copies of the principal and all subsequent deeds including the latest deed, along with the certificate of the registration issued by the Registrar of Firms, in case the firm is registered.
4. NOC from secured creditors: Written consent or No Objection Certificate from all the secured creditors of the applicant.
5. Consent of members: Written consent, from the majority of members whether present in person or by proxy at a general meeting, agreeing for such registration.
6. Undertaking from proposed directors: An undertaking that the proposed directors shall comply with the requirements of the Indian Stamp Act, 1899 as applicable.
7. Copy of income tax return: A copy of the latest income tax return of the LLP or firm, as the case may be.