Winding up or Closing a One Person Company (OPC)
Filing a proper application for winding up or closing a one person company (OPC), and following the prescribed procedure for closure, are absolutely necessary for closing the OPC legally and officially. Though inoperative, an OPC is compulsorily required to file all regulatory compliances and regular returns punctually, unless it has filed the closure documents with the concerned ROC.
It is because, to make the OPC free from its legal and regulatory compliances and thus declare that closed, there is mandatory need of updating the ROC or MCA database related with the closing OPC. A One Person Company (OPC) may be wound up either voluntarily or by the order of the Tribunal. Also, an OPC which has been inoperative regularly for past one year, counted from the date of its incorporation, may apply for closure under the Fast Track Exit (FTE) scheme of the MCA. This webpage offers very informative and useful information regarding "how to close OPC - procedure for one person company closure", together with the documents required for this purpose in India.
Here, it may be noted that, this winding up of an OPC is different from changing it to a private or public limited company at any point of time when its paid-up capital exceeds INR 50 Lac OR its average annual turnover of three immediately preceding consecutive financial years becomes more than INR 2 Crore.
What Documents are Required to Close a One Person Company
In general, the various documents required to close a one person company in India are the following:
- The Application for Striking Off the OPC
- Board Resolution in favor of the desired winding up
- Consent Letter and Affidavit of its Director
- Consent of the Creditors of the OPC
- Indemnity Bond
- Statement of Accounts
- And, the Statement of the Assets and Liabilities
How to Close OPC - Procedure for One Person Company Closure
In general, the entire procedure for one person company closure in India voluntarily, involves the following processes or formalities:
- Passing a resolution with support of 2/3rd in value of the creditors of the OPC, for voluntary winding up of the company.
- The notice of this board resolution is to be submitted to the relevant ROC within 10 days of its approval from the creditors. A declaration is also to be submitted stating that the OPC has no debts, or if there are some debts, these will be paid off through sales of its assets within one year.
- Filing the application for striking off the OPC with the concerned ROC, together with submitting the Board Resolution in favor of winding up. In case, the closing OPC has been inactive for one year after its incorporation, then the Form FTE is to be filed with ROC, within 30 days from the date of signing the statement of assets and liabilities of the closing OPC.
- The resolution for winding up is also to be advertised in the Official Gazette and also in a newspaper which is widely circulated in the district where the head office/registered office of the closing OPC is located.
- Appointing a registered Liquidator for processing of necessary tasks associated with the winding up of the OPC. This liquidator is required to maintain and submit all requisite reports and accounts to the Tribunal and also to the Registrar.
- Submission of the Statement of Accounts, Statement of Assets and Liabilities, Indemnity Bond, etc.
- Lastly, if satisfied, the Tribunal and the Registrar will pass the winding up, and declare the OPC closed.