Convert Company

In today’s modern world, we have seen an enormous increase in the need and rate of expansion, which has caused a rapid change in company status to facilitate necessary needs and overcome the limitations of existing ones. Therefore, we at CompRegi provide various services for the different conversion options currently available or possible as per Indian taxation and current government regulations. 

The Companies Act in India offers provisions for a business developed in this country to change its legal form due to various reasons. Investors who want to open a company in India can also shut down their business and re-register under a new business form. 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. 

Documents required for company conversion

EGM Notice

Regarding conversion of company along with certified copy of resolution

MOA and AOA

Amended copies of MOA and AOA.

NOC

Of all the creditors and its members.

Balance Sheet

Latest balance sheet of the company.

Convert Company Cost

We at Compregi believe in complete transparency in the complete registration process of your company. Below mentioned cost structure includes all the necessary government fees required at multiple stages of registration.

INCREASE AUTHORIZED CAPITAL

1499/-
  • Free Consultancy
  • Free Search Check
  • Preview before Filing

CONVERT COMPANY

1499/-
  • Free Consultancy
  • Free Search Check
  • Preview before Filing
  • 100% Peace of Mind

ROC/ANNUAL RETURN FILLING

1499/-
  • Free Consultancy
  • Free Search Check
  • Preview before Filing

Process of Converting a Registered Company:

According to section 18 of the Companies Act of 2013, any company that is already registered can change into a different type of company by changing the Memorandum of Association (MoA) and Articles of Association (AoA) of the company. 

If a Private Ltd. Company alters its articles in such a manner that it no longer includes the restrictions and limitations that 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. 

In case any alterations made to the MoA/AoA 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. 

Your application must be submitted to the Registrar of Companies or the ROC for such conversion. The previous registration of that specific company shall be closed once the registrar is satisfied with the registration provisions. (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 15 days in such manner as may be prescribed, who shall register the same.) 

It is to be duly noted that the registration of a company under this section 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. 

Then, the Registrar shall issue a new Certificate of Incorporation in the same manner as its first registration.

The following are the specific procedures for the conversion of different types of companies:
01
Section 8 Company Into Other Company
A company registered under section 8 shall not alter the provisions of its memorandum or articles without the previous approval of the Central Government. [These powers have been granted to Regional Directors.] It cannot be converted to One Person Company (OPC).

If a Section 8 Company intends to convert itself into a company of any other kind, it shall pass a special resolution at a general meeting to approve such conversion. The explanatory statement annexed to the notice convening the general meeting shall state in detail the reasons for opting for such conversion.

The company must file an application in Form INC-18 with the Regional Director with the prescribed 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.
02
Private Ltd. Company to an OPC
The conversion of a Private Limited Company into an OPC is allowed, according to the Companies Act of 2013. Since April 1, 2014, Section 18 of the Companies Act expressly permits the conversion of a private limited company that is already registered. No objection certificate must be obtained from all members and creditors for converting a private company into an OPC.
03
OPC Into a Private or Public Company
An OPC cannot be converted into a Section 8 Company. Conversion of an OPC into a Public or Private Company is governed by Sections 18 & 122 of the Companies Act, 2013 and the Provisions of Companies Incorporation Rules of 2014. OPC can convert itself voluntarily into a private company or public company as per section 18 of the Companies Act, 2013.

There are two ways to transform an OPC into a private limited company and this is freely and voluntarily or mandatorily. Here, the OPC’s MoA and AoA need to be changed to meet the new standards of the private or public limited company. You must also pass a resolution as an OPC in support of the conversion and increase the number of members and directors to at least 2.
04
Proprietorship into a Private Ltd. Company
The Companies Act of 2013 states the procedures, requirements, and compliances for converting a sole proprietorship into a Private Limited Company. The Income Tax Act of 1961 governs the taxation aspects of converting a sole proprietorship to a Private Limited Company. It outlines the tax implications, benefits, and obligations associated with the conversion.

It is important to separate the business from the proprietor, i.e. making the business a separate legal entity. An agreement to sell the firm is often drafted between the Proprietorship and the Private Limited Company to transform a Sole Proprietorship into a Private Limited Company. Also, the newly created Private Limited Company should take over the Sole Proprietorship Concern to complete the process as stated in its MoA.

05
LLP to a Private Ltd. Company
As per Section 366 of the Companies Act, 2013 and the Firm (Authorized to Register) Rules of 2014, any limited liability partnership formed under any other law for the time being in force can convert itself into a private limited company. No objection certificate must be obtained from all members, creditors, and the ROC, and newspaper advertising in English and one in vernacular should appear in local and national publications.
06
Private Ltd. Company into an LLP
To convert a private limited into an LLP, the business or the company should not have a security interest in its assets when it is being applied for the conversion into an LLP, Only the authorized shareholders of the business will be considered the partners of the LLP, post-conversion, the company will be dissolved, the company’s registrar removes the name of the Private Limited Company from its records as well as register. All the liabilities, assets, interests, and obligations of the Private Limited Company get transferred to the Limited Liability Partnership when the company gets converted.
07
Private Limited Company to a Public Limited Company
A private limited company and its business can easily modify its status to a public limited company. For this conversion, the passing of a special resolution is necessary. A unique solution would require more than three-quarters of the members present or a majority vote.

The Companies Act’s Section 149 deals with appointing the company’s directors. Section 13 and Rule 29 of the Companies (Incorporation) Amendment Rules, 2020, provide that the MOA must be changed when a private limited company is converted to a public limited company. The Companies (Incorporation) Amendment Rules, 2020, Section 14, and Rule 33 deal with changing the Company’s AOA.
08
Public Limited Company to a Private Limited Company
According to Section 31 of the Companies Act, a public company can modify its business form into a private company, regardless of whether the respective company was incorporated from the beginning as a public limited company or it was converted throughout its lifetime into this legal entity, as per Section 44 of the Act.

As per Section 14(1) of the Companies Act, 2013, any modification or alteration that results in the conversion of a public company into a private company must first receive approval from the central government in the form of an order, which must be issued.

On December 18, 2018, MCA added Rule 41 for the conversion of public companies into private companies, and its authority to approve the conversion of public companies into private companies was delegated to the regional director, of the Companies (Incorporation) Rules, 2014.

Benefits of Converting a Company:

Companies may alter their legal framework to gain several benefits. Company conversion is promoted as one of the least expensive and complicated ways to change a business entity

For example, an LLP might decide to turn into a company to start awarding stock options to staff members, reduce tax liabilities, or possibly draw in some venture capitalists.

On the other hand, a company might change into an LLP to benefit from the latter’s flexibility in decision-making, pass-through taxation (where taxes are passed through the company to the owners), or just to get rid of all the ongoing administrative paperwork.

Documents Required for Converting a Company

01
EGM Notice
02
Amended copies of MoA (Memorandum of Association) and AoA (Articles of Association).
03
The latest balance sheet of the company.
04
No Objection Certificate of all the creditors and its members.

Why Choose CompRegi to Convert Your Company?

CompRegi offers seamless and hassle-free company conversion services. Our team of experts will guide you through the entire process and ensure a smooth transition from start to finish. Don’t let complicated paperwork and legal requirements hold you back. Take the first step towards success and convert your company with CompRegi. Buy our Convert Company package available at an amazingly affordable price of Rs. 1499/- in which we provide added services like Free Consultancy, Free Search Check, and Preview before Filing. 

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