Close a One Person Company

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ABOUT THIS PRACTICE

If an OPC remains non-functional for more than an year from the date of incorporation then the owner is eligible to apply for closure of the company under the normal procedure or Fast Track Exit (FTE) scheme of the MCA. If not so it can be winded up voluntarily or by the order of the Tribunal. Although it’s inoperative it becomes a compulsion to file all regulatory compliances and regular returns timely, unless it has filed the closure documents with the concerned ROC. Hence it is better to file for the closure, so that the members of the company get rid of fulfilling the legal and regulatory compliances.

Methods of Winding Up One Person Company

Winding Up: This type of dissolution is done by conducting a meeting approved by at least 2/3 of the creditors participating in the meeting. Then the management board must submit to the Commercial Register and request (in writing or electronic form via the company registration portal), the members dissolution resolution and the minutes of the general meeting. Winding up is a complicated process which is certainly executed when the company has assets and liabilities. In case of winding up a liquidator needs to be appointed to manage the affairs of the wind up of company.
Striking off: Striking off or removal of OPC through the Fast track exit scheme. When a company receives the status of an inoperative company which means it has no activity as a company since its establishment or in the past one year it becomes a non-functional Company which can be winded up with a fast-track procedure which is through STK-2 form. However, it should not have any assets or liabilities. This can be filed by ROC or by the company itself. Strike off is done by the Registrar in agreement with the requirements of the Act.

Documents Required

Incorporation Documents: Company’s MoA – AoA, Certificate of Incorporation, PAN card and other registration certificates
Accounting Information: The financial statement of the Company for the most recent year, prepared prior to 30 days of filing the application
Details of Activity:Details whether the company has been operative for any period. If yes, since when the operations are discontinued.
Legal Liabilities: A statement regarding pending litigation, if any involving the company
NOC from Creditors: Company must provide NOC for closure from creditors, if any (Draft to be provided by Legal Nestors experts)
NOC from Regulatory Bodies: NoC for closure to be obtained from Income Tax Department, SEBI, RBI, etc. if relevant