If a One Person Company (OPC) has remained inactive for more than a year since its incorporation, the owner can opt for closure either through the standard procedure or via the MCA’s Fast Track Exit (FTE) scheme. Alternatively, the OPC may be wound up voluntarily or through a Tribunal order. Even during inactivity, the OPC is required to file all statutory compliances and returns until the closure documents are submitted to the Registrar of Companies (RoC). Filing for closure is therefore recommended to release the member from ongoing legal and compliance responsibilities.
This method of dissolution involves convening a meeting in which at least two-thirds of the attending creditors approve the decision. Afterwards, the management must submit a written or electronic application to the Commercial Register, including the members’ resolution for dissolution and the minutes of the general meeting. Winding up is a more comprehensive procedure, generally applied when a company holds assets and liabilities. In such cases, a liquidator is appointed to manage the company’s affairs throughout the winding-up process.
The Fast Track Exit (FTE) scheme allows for the striking off or removal of a One Person Company (OPC). An OPC that has remained dormant—having no business activity since incorporation or over the past year—is considered defunct and can be closed via a simplified process by filing Form STK-2. This option is available only if the company has no assets or liabilities. The application for closure can be filed either by the company itself or by the Registrar of Companies (ROC) in accordance with the Companies Act provisions.
Copies of the Company’s Memorandum of Association (MoA) and Articles of Association (AoA), Certificate of Incorporation, PAN card, and any other relevant registration certificates.
The company’s latest financial statement for the preceding year, prepared at least 30 days before submitting the application.
Details indicating whether the company has been operational at any point. If yes, specify the date since operations were discontinued.
A declaration of any pending legal cases or disputes involving the company, if applicable.
The company is required to obtain a No Objection Certificate (NOC) from its creditors, if applicable (draft to be prepared by LW experts).
A No Objection Certificate (NOC) for closure must be obtained from relevant authorities such as the Income Tax Department, SEBI, RBI, etc., if applicable.
Call us at: 9414883452 or Email us : contact@submitreturn.com
*Subject to Government processing time
An OPC can apply for closure when it is inactive and wishes to relieve itself from liabilities and compliance obligations. Before filing the closure application, all liabilities must be cleared and a No Objection Certificate (NOC) obtained from creditors. A meeting must then be held where the director and members approve the closure through a special resolution or with the consent of at least 75% of the paid-up share capital.
The Registrar of Companies has the authority to remove a company’s name from the register if there is reasonable cause to believe that:
The company has failed to commence its business within one year of incorporation; or
The company has not carried out any business or operations for the two immediately preceding financial years and has not applied for dormant company status during that period.
The closure of a company is filed using Form STK-2, accompanied by a government fee of Rs. 5,000 and the required supporting documents. For the closure of a One Person Company, the following steps must be completed:
Settle all outstanding liabilities and obtain a No Objection Certificate (NOC) for the closure.
Secure consent from at least two-thirds of the creditors.
After filing the application with the Ministry of Corporate Affairs, it takes about 90 days for striking off the Company from MCA records.
ROC will publish list of companies struck off in the Official Gazette. The Company under fast track exit mode will be considered closed from the date of publication of the notice in Official Gazette.
The closing documents have to be filed within 30 days from the date of signing of the assets and liabilities statement.
It is necessary to intimate the Registrar for the closure of Private Limited Company to update the MCA data and make company free from all its legal compliances.
Closure of a One Person Company (OPC) is carried out voluntarily through the fast track exit scheme. The winding up of a company can be either voluntary or ordered by the Court, which appoints an official liquidator to oversee the winding-up process. Dissolution is initiated by the Court to legally terminate the company’s existence.
Fast Track Exit is a scheme introduced by the Ministry of Corporate Affairs (MCA) for inactive companies to wind up and get their names struck off from the MCA record with lesser formalities.
Closure is the ideal option when a company is not operational because it:
Eliminates yearly compliance costs
Removes the risk of non-compliance
Avoids exposure to heavy penalties and legal actions
Prevents the company from falling into default
Call us at: 9414883452 or Email us : contact@submitreturn.com
Here’s what keeps us going strong.
