Strike Off an One Person Company(OPC): Process, Benefits, & Requirements
Introduction
Striking off an One Person Company (OPC) is a legal process that removes the company from the official records of the Ministry of Corporate Affairs (MCA). This process is usually initiated when the company is no longer conducting business or has ceased its operations. If an OPC is inactive or not complying with filing requirements, striking it off can help avoid unnecessary costs and liabilities. In this blog, we’ll walk you through the process, requirements, and benefits of striking off an OPC, ensuring you understand the steps involved in this essential business procedure.
What is a Strike Off?
The Ministry of Corporate Affairs (MCA) officially removes a company’s name from its register through a process called strike off. When an OPC (One Person Company) becomes non-operational or fails to meet legal compliance requirements, the company can file an application with the ROC (Registrar of Companies) to strike it off. Once the ROC strikes off the company, it ceases to exist legally and no longer needs to file returns or maintain accounts. This method offers a simple and cost-effective way to close a dormant or inactive company.
Eligibility for Strike Off
An One Person Company (OPC) can apply for strike off only if it meets certain conditions set by the Ministry of Corporate Affairs (MCA). The key eligibility criteria include:
- The company has not carried out any business or operation for the last two financial years.
- The company has no outstanding liabilities or pending legal disputes.
- The company has filed all overdue financial statements and annual returns up to the end of the financial year in which it ceased to carry out business.
- The company is not being wound up or under inspection or investigation.
- The shareholder or director of the OPC must consent to the strike off process.
What Documents are Required for Striking Off an OPC?
- Form STK-2
- Board Resolution
- Indemnity Bond (Form STK-3)
- Affidavit (Form STK-4)
- Statement of Accounts
- Copy of PAN Card
- Identity Proof of Director
- Consent Letter
- Copy of MOA & AOA
- Proof of No Liabilities
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What is the Process of Striking Off an OPC?
Here is step-by-step process to strike off an One Person Company (OPC) under Section 248 of the Companies Act, 2013;
Step 1: Hold a Board Meeting
The director of the OPC must conduct a board meeting to pass a resolution approving the decision to strike off the company. This resolution also authorizes the filing of Form STK-2.
Step 2: Close Bank Accounts and Settle Liabilities
Before applying for strike off, the company must close all its bank accounts and settle any pending liabilities or dues. A no-dues declaration should be prepared.
Step 3: Prepare the Necessary Documents
Collect and prepare all required documents, including the indemnity bond, affidavit, statement of accounts certified by a CA, and identity/address proof of the director.
Step 4: File Form STK-2 with the ROC
Submit the application for strike off in Form STK-2 to the Registrar of Companies along with the prescribed government fees and required documents.
Step 5: Verification by ROC
The Registrar will review the application and attached documents. If everything is in order, the Registrar will issue a notice and publish it on the MCA website and in the Official Gazette.
Step 6: Strike Off and Dissolution
If no one raises objections within 30 days of publication, the ROC will strike off the company’s name from the register and issue a notice confirming the dissolution of the OPC.
What are the Benefits of Striking Off an OPC?
Striking off an OPC can offer several advantages, especially when the business is no longer active or viable. Here are some key benefits:
- Cost Savings: It helps avoid recurring costs related to compliance, audits, and annual filings.
- Simplified Closure: Compared to winding up, strike off is a quicker and less complicated way to close a company.
- No Legal Burden: Once struck off, the company is removed from MCA records, and directors are no longer responsible for regulatory filings or penalties.
- Clears Unused Business Identity: It formally closes the company, preventing misuse of its name, PAN, or registration details.
- Peace of Mind: Ensures that there are no future obligations or liabilities in the name of the dormant company.
Common Mistakes an OPC must avoid before Striking off an OPC
- Not Clearing Outstanding Liabilities: Submitting the application without settling debts, taxes, or dues can result in rejection.
- Filing with Incomplete or Incorrect Documents: Missing affidavits, improper statement of accounts, or unsigned forms are common errors.
- Non-filing of Annual Returns: If the company hasn’t filed its financial statements and annual returns, the ROC may reject the strike-off request.
- Skipping Bank Account Closure: Not closing the company’s bank account before applying can complicate the process.
- Applying During Legal Proceedings: If the company is under investigation, inspection, or legal dispute, it is not eligible for strike off.
Conclusion
Striking off an One Person Company (OPC) is a practical and efficient way to officially close a non-operational business. It helps reduce compliance burdens, avoid unnecessary penalties, and ensures legal closure under the Companies Act, 2013. By following the correct process and submitting accurate documents, business owners can achieve a stress-free strike off through the MCA.
Suggested Read :
Legal Consequences of Strike Off OPC
Differences between Dormant & Strike off Companies
FAQ
1. What is the government fee for filing Form STK-2 for strike off?
The government fee for filing Form STK-2 with the ROC is ₹10,000.
2. When can an OPC apply for strike off under Section 248?
An OPC can apply for strike off after remaining inactive for two consecutive financial years or when it has no business operations.
3. Where is the strike-off application submitted?
The strike-off application (Form STK-2) is submitted online to the Registrar of Companies (ROC) via the MCA portal.
4. Why is it important to file all pending returns before applying for strike off?
Filing all overdue returns ensures compliance and prevents the application from being rejected by the ROC.
5. Who is eligible to initiate the strike off of an OPC?
The director or sole member of the OPC can initiate the strike off process by passing a board resolution and filing Form STK-2.
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