Closing an OPC

For closing a One Person Company, you can either declare the company as defunct or make an application with the registrar for winding up of the company.

The MCA (Ministry of Corporate Affairs) provides the new rules for the closure of the company. You can close your company by any of the following ways:

1. Closure of company as defunct

2. Winding up of company

• Compulsory Winding up (by tribunal)
• Voluntary Winding up

Closure of company as defunct

You can shut the company by declaring as a defunct company and file the application for strike off the name of the company from the ROC. For closing of the company, you need to follow the prescribed procedure as you followed at the time of incorporation of the company. At least one year from the date of incorporation of the company must have passed for declaring company as defunct.

Procedure

• Hold a board meeting and pass a board resolution with the majority for declaration of the company as defunct.
• Make a declaration by the majority of directors that the company has no debts and if have then able to pay the debts.
• In case company is not active for the period of one year from the date of incorporation then company can be wound up by fast track method, file the form within 30 days from the date of signing the statement of assets and liabilities.
• File the indemnity bond with the registrar duly signed by the directors of the company declaring that in case company having any liability, such liability met by the applicants.
• Submit all the required statements of accounts and other documents with registrar which provides the true and fair view of the company.
• If registrar is satisfied, then registrar will pass an order for close the company.

Reasons

• If company itself wants to close.
• If company is not in operation for the period of one year.
• If company is not even complying with the law.

Winding up of company

An OPC registered in India with MCA (Ministry of Corporate Affairs) can be closed voluntarily but after two years from the date of incorporation of the company. No OPC is allowed to wind up its business before the expiration of the period of two years except in a case when company cross the threshold limit.

Company can be wind up before expiration of two years if tribunal is in opinion to close the company and pass an order for the same.

Procedure

• Convene a board meeting to pass a resolution and approve the notice for general meeting.
• Make a declaration by the majority of directors that the company has no debts and if have then able to pay the debts.
• After issuing a notice hold a general meeting and pass a resolution for winding up of a company.
• The winding up of a company start from the date of passing the resolution in a general meeting.
• Within 14 days from the date of passing the resolution file the resolution with the registrar and advertise in a local newspaper.
• Hold a meeting of creditors (if any) to obtain the accent for the winding up of the company.
• Appoint a liquidator within 10 days from the date of days of passing a resolution to maintain and file the requisite reports.
• File the notice with the registrar for appointment of liquidator.
• Prepare the liquidators account after winding up of the affairs of the company.
• All the accounts must be audited and reflect the true view of the company.
• If tribunal is satisfied, then tribunal can pass an order to wind up a company.
• Tribunal also has the power to dismiss the application or to appoint a provisional liquidator till the time of passing a winding up order.

Related: Documents Needed to Close an OPC

Reasons

• If One Person Company cross the threshold limit which is exceeding paid up share capital of Rs.50 lakhs or average annual turnover of Rs.2 crores.
• If company is unable to pay debts.
• If tribunal pass the order to wind up the company.
• If company if not complying with the annual compliances.