What Is The Process For Dissolving A One Person Company?

Dissolving a One Person Company (OPC) in India

1. Resolutions and Consent: The owner-director begins the voluntary closure with a board resolution, and shareholders' consent, often through a special resolution via written consent or an extraordinary general meeting, is needed to finalize the dissolution.

2. Creditors' Approval: The OPC should list its outstanding debts and convene a creditors' meeting for their approval on dissolution, allowing payments or asset usage to settle the debts.

3. Assets and Liabilities Settlement: The OPC is advised to utilize its assets to settle outstanding debts and liabilities, and any remaining assets or surplus funds should be distributed to the owner in alignment with the dissolution plan.

4. Filing Application for Closure: To initiate voluntary closure, the OPC must submit a formal application to the Registrar of Companies (ROC), incorporating details like reasons for closure, a comprehensive declaration of assets and liabilities, an auditor's report, and, if relevant, the consent of creditors.

5. ROC Approval: The ROC will review the application and associated documents. If the ROC is satisfied with the application and all legal requirements have been met, they will issue a closure order.

6. Advertisement: The OPC must publish a public notice about its dissolution in at least one local and one national newspaper.

7. Objections: A period is provided during which creditors and other stakeholders may raise objections to the dissolution. If there are valid objections, the ROC may conduct an inquiry.

8. Closure Order: If there are no valid objections or after addressing any objections raised, the ROC will issue a closure order. The OPC is officially dissolved from the date mentioned in the order.

9. ROC Compliance: After receiving the closure order, the OPC should ensure compliance with all the necessary formalities as required by the ROC.

10. Tax Clearance: The OPC should obtain tax clearance certificates from the income tax and GST departments to ensure that all tax liabilities are settled.

11. Removal from MCA Records: The ROC will remove the name of the OPC from the records of the Ministry of Corporate Affairs (MCA) once the dissolution process is completed.

12. Winding Up: The OPC's bank accounts, contracts, and licenses should be closed, and the company should be fully wound up.