For several entrepreneurs in Chennai, the best option to commence a business is to start a Conversion of a Private Limited Company to an OPC in Chennai. Private Limited Companies offer limited liability, credibility, and provide an option to raise funds. As businesses develop, the promoters’ needs may change. In some cases, companies outgrow their ownership structure, usually when only one individual is actively managing a business. This is when transitioning the Private Limited Company into a One Person Company (OPC) is a rational and strategic move.
If you reside in Chennai and are curious about what converting entails, what the changeover process means, and whether it’s appropriate for you, then you have come to the right place. Let’s break it down in straightforward, practical terms.
Why Convert from a Private Limited Company to an OPC?
Let’s be honest, to continue running a Private Limited Company requires extensive compliance work, board meetings, and documentation. This makes sense, given tthat here are multiple shareholders and directors. Conversely, if the business has gradually morphed into a one-person-run business, then holding on to the Private Limited structure may feel like burdensome compliance.
Changing to an OPC has the option to:
✅ Help comply with requirements
✅ Give you all manageability
✅ Still benefits from limited liability
✅ Save time in decision-making
✅ Provide flexibility without losing legal cover
An OPC is a great hybrid form of incorporation for a sole trader in Chennai, especially for businesses working in the IT services sector, consulting, or creative sectors.
Legal Basis of Conversion
The ability for the Private Limited Company to convert to an OPC is framed in the Companies Act, 2013, which governs the incorporation of companies in India, under Section 18, read with Rule 7 of the Companies (Incorporation) Rules, 2014.
There are, however, eligibility requirements:
Who Can Convert?
✔ Only a Private Limited Company with paid-up share capital of ₹50 lakh or less
✔ Only with annual turnover for the previous financial year of ₹2 crore or less
If you meettheses criteria in your Chennai compa,ny you will be able to proceed with the process of converting to an OPC.
Step-by-Step Guide to Converting a Private Limited Company to an OPC in Chennai
Here is a simplified stepwise approach to help you understand how this is done:
1. Board Meeting
The first step involves having the Board of Directors meet together to formally resolve to convert the Private Limited Company to an OPC. The board members must together pass a resolution to authorize a Director to do whatever is required to complete the conversion process.
2. Shareholder Approval
The next step is to hold a general meeting of the shareholders and pass a special resolution approving the conversion. This step is legally mandated.
Note: You are required to file the special resolution within 30 days to the Registrar of Companies, Chennai, in Form MGT-14.
3. Applying to the Registrar of Companies
Once the company has shareholder approval, the application for conversion must be made to the ROC using Form INC-6 with supporting documents.
Documents Required for Application for Conversion
Here is an easy checklist of the documents required for the conversion process:
📄 Copy of the Board Resolution
📄 Copy of Shareholder Special Resolution
📄 Altered Memorandum of Association (MOA) and Articles of Association (AOA)
📄 Latest audited financial statements of the Company
📄 List of creditors and consent (if applicable)
📄 Affidavit and declaration by the sole member who is taking ownership
📄 Nominee consent (required for OPC)
📄 Identity and address proof of the sole member and nominee
Approval and Certificate Issuance
If the DOC, Chennai, is satisfied with your application and documents, they will issue a new Certificate of Incorporation showing the company is now an OPC.
Key Notes to Remember
✔ There is no change in the identity of the company, only the structure
✔ Liability, obligation, and contracts are not affected by the conversion
✔ You need to update the bank record, PAN, TAN, and statutory registrations after conversion
✔ The nominee of the OPC must be an Indian citizen who is a resident
Benefits of Converting to an OPC
Converting to an OPC will offer you several operational and administrative benefits, primarily in Chennai, where business is easier:
1. Easier compliance
OPCs have light compliance as compared to Private Limited Companies — fewer meetings,fewerr filings, as well as lower statutory requirements.
2. Full Control Without Liability
You own the company by yourself, but that also means you enjoy the benefits of limited liability,-meaning your assets are safe from the business risks involved.
3. Credibility
An OPC has a separate legal identity, just like a Private Limited Company. This adds aspects of professionalism and trust as you engage clients, vendors, or apply for loans.
4. Speed of Decision Making
You are required to make a business decision without having to consult any other shareholders or directors. This enables fast business decisions, which is especially important for a small, dynamic business!
Who is SKU or OPC suitable for in Chennai?
Going through with an OPC is ideal if you, too, are:
✔ The sole owner who is actively managing the company
✔ A small business that is earning less than ₹2 crore in revenue
✔ A business in the technology field, including IT services, consulting, freelancing, design, or trading
✔ Looking for a legal structure without a lot of compliance
Many of the entrepreneurs that have working alone, especially those in technology parks like Tidel Park or startups in Guindy and Velachery areas of Chennai, prefer this as their legal structure.
Conclusion
As you can see, the process of converting a private limited company into an OPC in Chennai is not difficult, but has to be performed carefully and legally. With the right expertise and documentation, the process can be quite straightforward.
If you feel that your Private Limited Company structure no longer reflects your business reality, and you are running the ship by yourself, converting to an OPC could be the way to go. You’ve streamlined your functionality, relieved yourself of compliance obligations, and you still have legal protection of a registered entity.
Need assistance converting in Chennai?
If you don’t know what steps to take, are unsure how to prepare documentation, or want to do it stress-free, professional service providers in Chennai, like Kanakkupillai, can provide end-to-end service, from the documentation to the ROC filings.