Strike off OPC
Strike off OPC is the act of shutting a One Person’s Company (OPC). One Person Company, or OPC for short, is a business founded by one individual. In accordance with Section 2(62) of the Companies Act of 2013, a business consisting of just one worker is known as an OPC.
Since there are precise procedures for starting and operating businesses, similarly, there are also particular procedures for closing businesses.
This article will briefly discuss the procedure and documents required to strike off OPC in India.
Read More: Companies Act 2013
Documents needed to strike off OPC
- Incorporation records– Company’s incorporation documents, including the AOA and MOA of the company, incorporation, and other necessary certificates.
- Financial report- The latest financial report of the firm was prepared 30 days prior to submitting the application.
- Audited account statement- An audited account statement by a Chartered Accountant detailing the firm’s assets and liabilities must be provided.
- Legal Obligations- A statement about any active legal actions the corporation may be involved in is required if there are any.
- NOC from Creditors- If the business has creditors, the application form must also include a signed statement from each one of them. If there is no creditor, the corporation should declare that there are no creditors.
- NOC from the governing authorities– If applicable, acquire an NoC for the strike off OPC from the Income Tax Department, the Reserve Bank of India, and the other governing authorities.
- Director’s consent– The director might sign the consent letter to show their support.
- Indemnity Bond- Accurately signed indemnity bond by the director must be provided.
- Statement with Board Resolution- A statement stating that the OPC is debt-free or, in the event that it has debt, it is capable of settling its debts by liquidating its holdings within one year is required to be presented with the board resolution.
Read More: Financial Reporting Services In India
Procedure to strike off OPC
- Filing applications: The application form to strike off OPC must be submitted via the STK-2 form along with the necessary documents to the Registrar of Companies(ROC).
- Verification of documents: Once the application is submitted, the Registrar of Companies will verify the documents.
- Notice issued by the ROC: The ROC will then publish a statement informing the general public about the strike off OPC and seeking protests or objections if there are any.
- Strike off OPC: If there are no objections and the Registrar is convinced, then once all the procedure has been completed, the Registrar shall strike off OPC and remove its name.
- Publishing a notification: The notification of the dissolution and strike off OPC shall be published in the Official Gazette.
Benefits of strike off OPC
There are various benefits to the shutting an inactive OPC. These benefits are:
- Reduces financial penalties- There is no requirement for the business to worry about finding itself in a position where it must face a penalty fee for issues that are not resolved once the closing process has begun. When a business doesn’t submit its compliance upon schedule, it faces financial penalties. Consequently, it is wise to terminate One Person Company formally.
- Suitable organization– A better organization could be started with the assets from the one you’ve picked if it isn’t operating and making money.
- Reduces compliance expenditures– If the OPC is dormant or not operating, it is advised to terminate OPC instead of dealing with different rules like licensing, auditing, etc. Annual compliance expenditures are reduced as a result.
Methods of shutting an OPC in India
The two methods for shutting an OPC are as follows:
1. Windup OPC
- This type of closure can be carried out by calling a meeting. For closure, the majority, that is, 2/3 of the creditors who attended the meeting, must vote in favor of the closure.
- The general meeting notes and the shareholders’ decision for closure should then be submitted along with an application to the Commercial Register.
- A liquidator must be appointed to oversee the activities of the wound-up business as part of the long winding-up procedure.
2. Strike off OPC
- Using the Fast Track Exit (FTE) strategy to strike off OPC or remove OPC is a less complicated way to close down OPC.
- Whenever an OPC is designated as a dormant business, it can be dissolved quickly using a Fast Track Exit (FTE) method with the STK-2 form.
- Strike off OPC can be submitted under form STK 2, together with the required documentation and a mandatory fee of Rs.5000.
Appropriate actions to strike off OPC
The following appropriate actions can result in the strike off OPC:
- Clearing the liabilities
The basic stage entails settling off all of the Business’s debts, and once it has been done, a No Objection Certificate (NOC) must be acquired in written form from the creditors. This rule does not apply if the company or operations have not yet begun.
- Necessitate 75% Consent
In India, a One Person Company (OPC) is exempt from this requirement because the single person owns 100% of all the stocks, negating the necessity for any other party’s consent.
- Creating application
The following phase is to create an application and submit the application using form STK-2 to the Registrar of Companies (ROC).
The above article discusses the procedure for the strike off OPC in India. For any queries regarding the strike off OPC in India, you can consult our professionals at Odint Consultancy. Our professionals will help you in every stage of the procedure.
A one-person corporation (OPC) is a business that has only one owner.
- Reduces penalties
- Reduces compliance expenditures
- Filing applications form to the ROC
- Verification of documents by the ROC
- Notice issued by the ROC for seeking objections, if there are any.
- If there are no objections , the registrar will strike off OPC
- Strike off OPC shall be published in the Official Gazette.
Any OPC that hasn’t operated for over one year after its registration date is eligible to be closed under the FTE method.
The mandatory fee under the FTE program is Rs. 5000.