One Person  Company(OPC): Documents required to Strike off OPC

Introduction

The owner of an OPC may request the closure of the business using the standard procedure or the MCA’s Fast Track Exit (FTE) programme if it has been inactive for more than a year from the date of incorporation. If not, it maybe dissolved either voluntarily or at the Tribunal’s direction. In this article information on “How to Strike Off OPC?”, Methods for Striking off One Person Company, Documents required for  OPC Strike Off, and Advantages of Strike off an One Person Company.

Briefing on Strike Off an OPC (One Person Company)

If your One Person Company is no longer in operation, it should be closed down. According to the Companies Act, even if an OPC is inactive, it is still required to file all regulatory compliances and regular returns on time, unless the closure documents have already been submitted to the relevant ROC. As a result, applying for closure / strike off is preferable so that the company’s members are relieved of having to comply with legal and regulatory requirements.

Methods for Striking off One Person Company

• Strike off

OPC withdrawal or termination using the Fast track exit plan. When a company becomes a Dormant Company, that is, when it has not conducted any business since its founding or in the previous year, it becomes a Closed down Company and can be quickly wound up using the STK-2 form. The prerequisite is that it should be devoid of both assets and liabilities. The ROC or the company itself may file this. The Registrar performs a strike off in compliance with the Company Act requirements.

• Winding up

This kind of dissolution is accomplished through the holding of a meeting that is approved by at least 2/3 of the creditors present. If an OPC has more than one director, the management board must submit to the Commercial Register the members’ dissolution decision and the general meeting minutes, along with a request (in writing or electronically via the business registration portal). When a firm has assets and liabilities, winding up is a more involved process that must be carried out. If a firm is being wound up, a liquidator must be appointed to handle its business operations.

Advantages of OPC Strike off

• No Penalty – Once the closure is started, there is no need for the company to be worried about being in a state for paying the penalty fee for the causes that are not addressed.
• Free from Compliance – There is no need to be compliant since the company would be closed.
• Suitable Business – If the business that you have chosen is not running and yielding profits, then its resources can be used into a better one.

Documents required for OPC Strike Off

• Application for Striking off OPC

A copy of the application for removing the company name must be filed in form STK-2 with the Registrar of Companies in order to dissolve a business using the standard procedure. Before the Companies Act of 1956, businesses were shut down using the FTE (Fast Track Exit) procedure, which involved filing a striking-off application using Form FTE and paying the required government fees.

• Board Resolution for closing One Person Company

If an OPC have more than one director, than in that case it is necessary to pass a Board Resolution for closing One Person Company (OPC). An application to have the company’s name removed must be made by board resolution with a majority of 2/3 of the members. The company’s closing must be supported by the board of directors. The corporate director should be granted permission by the board to execute the indemnity bond and affidavits.

• Declaration Submission with Board Resolution of a company

A statement stating that the OPC is debt-free or, in the event that it does, that it can settle its debts by liquidating its assets within a year must be included with the board resolution.

• Affidavit of the Director

Every director of the firm must sign an appropriately certified affidavit in the prescribed form STK-4, which states that the company is ceasing operations and does not owe any fees. The director will cover any losses if any person suffers harm as a result of the company’s name being removed from public records.

• Approval from creditors

If the company has creditors, the application form must also include a signed statement from each one of them. If there is no creditor, the company must declare that there are no creditors.

• Consent letter signed by director

The consent letter might be signed by the director to indicate his approval. The written paper is how the director expresses his endorsement. The application for the company’s closure must also include a letter from the directors approving the closure.

• Asset and Liability Statement

The application must be submitted in the form STK-2 and include an audited copy of the statement of assets and liabilities. It discloses the company’s assets and obligations, proving that there are sufficient provisions in place to release the outstanding debt.

• Assurance Bond

A supporting document submitted with the application in the form STK-5 and duly signed by the company’s directors is an indemnity bond. This bond guarantees the individual’s losses in the event of the company’s liquidation.

• Account Statement

Statements of accounts that attest to the company’s financial strength and ability to cover customer losses and outstanding debt are also included with the application to strike off.

How to Strike off an OPC (One Person Company)?

• Passing a resolution for the company’s voluntarily winding up with the support of 2/3 of the OPC’s creditors.
• Within ten days after the creditors’ approval, the board resolution must be notified to the appropriate ROC. Also, there is a requirement of a certificate that the OPC has no debts, or that any debts it does have will be settled within a year through the sale of its assets.
• In case of more than one director, submitting the Board Resolution in favour of winding up along with the application for striking off the OPC with the relevant ROC. If the closing OPC has not operated for a year following its incorporation, the Form FTE must be submitted to the ROC within 30 days of the date the closing OPC’s statement of assets and liabilities was signed.
• The resolution for winding up must also be published in the Official Gazette and a widely read newspaper in the district where the closed OPC’s head office or registered office is located.
• Appointing a licensed liquidator to handle the necessary activities related to closing down the OPC This liquidator must maintain and provide the Tribunal and the Registrar with all necessary reports and accounts.
• Submission of the balance sheet, the assets and liabilities statement, the indemnity bond, etc to ROC.
• Finally, the Court and Registrar will approve the winding up and proclaim the OPC closed if they are satisfied.

Conclusion

Strike off, also referred to as company closure, is the process of winding up a company. According to newly published regulations, the Companies (Removal of Names of Companies) Rules, 2016, which are controlled by section 248 of the 2013 Companies Act, company closure is carried out.

Suggested Read :

OPC Turnover Limit

Legal Consequences of Strike Off OPC

What is winding up?

Process of LLP Strike Off

Differences between Dormant & Strike off Companies