Closing a One Person Company (OPC)
EOB provides expert assistance for closing an OPC with full compliances
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The closure for a One Person Company is simpler and easier if the company is non operative for more than a year. To avoid the long route of winding up, its best to close all transactions for a period of one year. However, it is important to file all the returns regularly and on time even if it is nil returns. Post a 12-month period the OPC can apply for a strike off with the MCA. This is done through the Fast-Track Exit (FTE) scheme of the MCA. The other alternative is a voluntary wining up or by the orders of the tribunal. The experts from EOB will assist you with a smooth transition with end-to-end support.
Methods of Winding Up One Person Company
Striking off is a far simpler process for closing an OPC. This is done through the fast-track exit scheme offered by the MCA. For this the company needs to remain dormant with no business activity for a minimum of 12 months. Once it reaches this stage, the FTE option can be exercised by duly submitting the relevant forms. At this stage, the company should have no assets or liabilities. This procedure makes it simpler for closing the business. There is no need for a liquidator in this case and its automatic.
This is a more tedious procedure but in cases where this option is exercised, it is done by holding a meeting with at least 66% (or two thirds) of the creditors and seeking their approval. This is followed by submission of a request by the Management of the company to the Commercial Registrar. The management board must submit a dissolution resolution to the Commercial Register along with the minutes of the general meeting. A liquidator is appointed in such cases to manage the process of the winding up.
Documents Required to dissolve a one person company
THE PROCEDURE
Procedure for OPC Strike-off
- Collect relevant information and documents needed
- Review the documents furnished
- Drafting of resolutions, affidavit, indemnity bond and other documents.
- Collect signatures on the required documents.
- Filing of Forms and documents with MCA
- Apply for Striking Off the company name.
- On clearance, the notice of strike-off is published on the MC portal.
FREQUENTLY ASKED QUESTIONS
Explore Dissolving One Person Company
How to dissolve a One Person Company (OPC) in India?
The OPC can file for closure through relevant forms and the applicable government fee along with all the required documents. Prior to this all liabilities of the company have to be cleared a consent is required from two thirds of the creditors.
Does it take long to dissolve a one person company under FTE scheme?
It takes 90 days after filing application with the MCA subject to all documents being in order.
Can Registrar of Company also remove the Company, i.e. mandatory company closure by Registrar of Companies (ROC)?
The Registrar of Companies (ROC) can remove the company name from the list of companies if:
- A Company fails to commence its business within one year of its incorporation or
- A company is not carrying on any business or operation for two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company.
When can a One person company be considered dissolved?
Once the name of the company is published in the official Gazette under the FTE mode, it is considered as closed / dissolved.
What is the time limit to file the closure documents with the Registrar?
The closing documents have to be filed within 30 days from the date of signing of the assets and liabilities statement.
Why is it necessary to intimate the Registrar for closing the One Person Company?
It is necessary to intimate the Registrar for the closure of Private Limited Company to update the MCA data and make company free from all its legal compliances.
Is it important to close the Company instead of leaving it dormant?
Yes. It is important to close a company that is non operative. Not doing so will lead to multiple complications. Since the DIN of the promoter is linked to the company, any future new business will have an adverse impact due to non-compliances in the previous entity.
Remember that a dormant company has to continue to file returns and adhere to compliances. Not following this can lead to high penalties and prosecution and will reflect as a default.
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