Striking off an One Person Company (OPC) in India refers to the legal process of removing a company’s name from the Register of Companies (RoC) and effectively dissolving it. This is typically done when the OPC is no longer in operation, or the owner (shareholder) wants to close the company due to various reasons like inactivity, closure of business, or any other personal or business-related decision.
When Can You Strike Off an OPC?
A One Person Company (OPC) can be struck off under the following circumstances:
- No Business Activity: If the OPC has not been carrying out any business or operations for a long period.
- Voluntary Decision by the Shareholder: The shareholder may decide to close the company because the business is no longer viable or no longer in operation.
- Non-compliance: If the OPC fails to comply with statutory filing and annual return requirements for a prolonged period.
- Financial Insolvency: If the OPC is no longer in a position to meet its financial obligations.
Steps for Striking Off an OPC
Here is the process to strike off a One Person Company:
1. Ensure the OPC is Eligible for Strike-Off
Before filing the application to strike off the company, the following conditions must be met:
- The company should not have any assets or liabilities.
- The company should not have any pending legal cases.
- The OPC should not be carrying on any business or operations.
- The company has filed all the necessary returns with the Registrar of Companies (RoC) and has cleared any outstanding dues.
2. Pass a Board Resolution
The sole shareholder (director) of the OPC must pass a Board Resolution stating the intent to strike off the company. This resolution must be signed by the director.
3. File Form STK-2
After passing the resolution, the next step is to file Form STK-2 with the Ministry of Corporate Affairs (MCA) to request the striking off of the OPC.
- Form STK-2 is a prescribed form under the Companies Act, 2013 for the striking off process.
- Required Attachments:
- Indemnity Bond (duly signed by the director and notarized).
- Affidavit from the director confirming that the company has no outstanding debts or liabilities.
- No Objection Certificate (NOC) from the company’s creditors (if applicable).
- Board Resolution for striking off the company.
4. Clear Pending Compliance and Liabilities
Before applying for striking off, ensure that all:
- Statutory filings have been completed.
- Tax liabilities have been cleared.
- Any pending disputes or legal issues are settled.
5. Apply to the Registrar of Companies (RoC)
After filing Form STK-2, the RoC will review the application and, if everything is in order, will publish the notice in the Official Gazette confirming the company’s striking off.
6. Public Notice in Official Gazette
- After reviewing the application, the RoC will issue a public notice in the Official Gazette about the proposed striking off of the company. This notice will provide a 30-day period for objections, if any, to be raised against the application.
- If no objections are raised within the 30 days, the striking off process will proceed.
7. Confirmation of Striking Off
After the expiry of the notice period, the RoC will issue a Certificate of Striking Off (Form STK-7), which officially dissolves the OPC and removes its name from the Register of Companies.
Documents Required for Striking Off an OPC
Here are the documents required for applying for the striking off:
- Form STK-2 (Application for Striking Off)
- Board Resolution passed by the director for striking off the company.
- Affidavit from the director confirming no debts or liabilities.
- Indemnity Bond (duly signed by the director and notarized).
- No Objection Certificate (NOC) from creditors (if applicable).
- Copy of the latest financial statements of the company.
- Statement of accounts showing no liabilities or assets.
Key Considerations Before Striking Off an OPC
- Outstanding Liabilities: Ensure that the OPC does not have any pending liabilities, outstanding taxes, or dues before applying for the strike off.
- Pending Filings: Ensure all mandatory filings (annual returns, financial statements, etc.) are up-to-date with the Registrar of Companies (RoC).
- Legal Cases: If there are any pending legal disputes or cases involving the OPC, the striking off application may not be accepted until they are resolved.
- Debt Settlement: If the OPC has creditors, ensure that all debts are settled or that the creditors have provided their consent for the company to be struck off.
- Tax Liabilities: Clear any pending GST, Income Tax, or other tax liabilities before initiating the process.
- Effect of Striking Off: Once the OPC is struck off, the company ceases to exist. Any assets or liabilities, legal matters, or disputes will be considered resolved, and the company will no longer have the legal capacity to engage in business activities.
Timeline for Striking Off
- Initial Processing: The initial processing of Form STK-2 takes around 30 days from the date of filing.
- Official Gazette Publication: After acceptance, the RoC will issue a notice in the Official Gazette, and objections, if any, are allowed within 30 days.
- Final Striking Off: If no objections are received, the RoC will issue a Certificate of Striking Off. The entire process may take around 2 to 3 months.
Benefits of Striking Off an OPC
- Cost Savings: By striking off the OPC, you save on annual compliance costs, including auditing, filing fees, and other statutory obligations.
- Legal Closure: It legally closes the company, ensuring that no further liabilities or obligations arise in the future.
- Freedom from Compliance: Once the company is struck off, you are free from the burden of ongoing compliance or filing requirements.