A business may need to be closed for many reasons that may be due to business failure or any other context or circumstance. As per the new rules by MCA (Ministry of Corporate Affairs) for the closure of the company.
A company can be closed in the following ways-
- Winding up of OPC
- Compulsory Winding up (by tribunal)
- Voluntary Winding up (By Promoter)
- Closure of company as defunct
The above options are explained below for a clear understanding of its applicability as per the situation:-
1.Winding Up of an OPC by Company Law Tribunal
An OPC registered in India with MCA (Ministry of Corporate Affairs) can be closed voluntarily but after two years from the date of incorporation of the company. No OPC is allowed to wind up its business before the expiration of the period of two years except in a case when a company crosses the threshold limit.
A one-person Company can be wind up before the expiration of two years if the tribunal is in opinion to close the company and pass an order for the same.
Key Reason for closing One Person Company by The Tribunal:
- If One Person Company crosses the threshold limit which is exceeding paid-up share capital of Rs.50 lakhs or average annual turnover of Rs.2 crores.
- If the company is unable to pay debts.
- If tribunal passes the order to wind up the company.
- If a company if not complying with the annual compliances.
The Following Procedures need to be followed for winning of an OPC Tribunal:
- Passing a resolution with the support of 2/3rd in the value of the creditors of the OPC, for voluntary winding up of the company.
- Within 10 days of its approval from the creditors, the notice of this board resolution is to be submitted to the relevant ROC. A declaration stating that the OPC has no debts, or if any, they will be cleared through the sales of its assets within one year.
- If the OPC has been inactive for one year after its incorporation, then the form FTE is to be filled with ROC within 30 days from the date of signing of closing OPC.
- The resolution for winding up is also to be advertised in the Official Gazette and also in a widely circulated newspaper in the district where head office or registered office of the closing OPC is situated.
- Appointment of a registered liquidator for processing of the necessary tasks associated with the winding up of the OPC. The liquidator is required to maintain and
- Submit all requisite reports and accounts to the tribunal and also to the registrar.
- Submission of the statement of accounts, statement of assets and liabilities, Indemnity Bond, etc.
- If satisfied, the Tribunal and the Registrar will pass the winding up and declare the OPC as closed.
Note: If you have any query please comment in the comment box below or Talk with a Company Secretary
2. Closure of Company as Defunct
The company can be shut by announcing it as a defunct company and then striking off the name of the company from the ROC. This can be done by filing the application. The procedure is same as the followed while incorporating the company. Before announcing the company as defunct, the company must have completed at least one year.
Key Reason for closing One Person Company as a Defunct:
- If the company itself wants to close.
- If a company is not in operation for the period of one year.
- If a company is not even complying with the law.
The procedure of Closing One Person Company as a Defunct:
- A board meeting needs to be held and a board resolution with the majority for declaring the company as defunct has to be passed.
- A declaration mentioning that the company is free of debts or is able to pay the debts if any needs to be done by the majority of directors.
- A declaration that the liability, if any, will be met by applicants; duly signed by the directors of the company on an indemnity bond should be filed.
- Submit all the required account statements and other documents providing the true and fair view of the company with the Registrar.
- The registrar will pass an order to shut the company if he is satisfied.
Talk with the Expert at Venture Care to get professional help in closing one person company, Call 020-65363633 or Contact us
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