What is Closure of One Person Company (OPC)?

Only two people could start a business in India before implementing the Companies Act 2013. The formation of the Company Act 2013 encourages the registration of One-Person Companies in India. Sometimes, the firm doesn't work correctly, which can result in the Company's closure for many reasons, including financial or other reasons. Closing a one-person company is a simple and easy process with the help of professionals. ApkaTax is always here to help you as we have a skilled professional team who will assist and guide you in one-person company closure.

What is Closure of One Person Company (OPC)?

• Compulsory company closure: Compulsory closure is initiated by the court orders as a company may be included in any illegal work, so the Company must be closed per the court orders. 
• Voluntary company closure: The voluntary closure is initiated by the Company's director, who decides to wind up the business. The Company can wind up for various reasons, whether a financial crisis or the owner's retirement.

What is One Person Company (OPC) Reasons?

Under the Companies Act of 2013, compulsory company closure by the Tribunal can occur on various grounds. These include:

• Equitable: When a company cannot operate its memorandum or disputes among shareholders persist, Section 271(1)(c) enables the Tribunal to order the winding up of one person company based on what is deemed just and equitable.
• Unable to Pay Debts: Section 271 allows for closing a company if a company is unable to pay a debt of at least Rs.1 lakh for a continuous 21-day period, empowering creditors to petition the Tribunal.
• Oppression and Mismanagement: Section 271(1)(b) permits winding up if a company's conduct harms the interests of members or the Company overall.
• Public Interest: When a company's activities adversely affect the public interest, Section 271(1)(f) empowers the Tribunal to order the Company's closing.
• Regulatory Non-Compliance: Failure to adhere to the Companies Act or other applicable laws can lead to closing a company under Section 271(1)(d).

What is One Person Company (OPC) Process?

The voluntary closure process for a one-person company involves many steps:

• A company needs to pass a resolution approved by at least 2/3rd of the creditors, indicating the voluntary closure of the Company.
• After all creditor's approval, the board resolution will submit the notice to the relevant registrar companies within ten days. In this submission, they will confirm that your company is free from all loans; if there are any, it must pay them within a year through asset sales. 
• Filing Form STK-2 for striking off the OPC with the concerned Registrar of Companies. This form and the board resolution for winding up can be filed if the OPC has been inactive for a year post-incorporation. This filing must occur within 30 days of signing the closing OPC's statement of assets and liabilities.
• Closing notices of OPC will be published in the official Gazette, and newspapers will circulate in the district where the registered Company is situated.  
• They appoint a registered liquidator responsible for the essential tasks related to company closure. All necessary reports and accounts, including the Statement of Accounts, Assets and Liabilities, and Indemnity Bond, must be submitted to the Tribunal and Registrar of Companies.
• They advertised the notice of closing the Company in the Official Gazette and a widely circulated newspaper in the district where the OPC's head office/registered office is located.

What is Closure of One Person Company (OPC) Documents?

These documents are necessary for winding up a one-person company in India:

• Application for Striking Off the OPC
• Indemnity Bond-
• Statement of Assets and Liabilities
• Approval from the Creditors of the OPC
• Board Resolution supporting the intended winding up
• Consent Letter and Affidavit from the Director
• Bank statement 

What is the One Person Company (OPC) Closure Fees?

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