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Strike Off of One Person Company

Strike-Off of One Person Company (OPC)

The process of strike-off refers to the removal of a company’s name from the Registrar of Companies (RoC) register. For a One Person Company (OPC), this process can be initiated either voluntarily by the company or by the Registrar of Companies (RoC) for non-compliance. Below is an outline of both methods and the procedure for striking off an OPC.

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    1. Voluntary Strike-Off of OPC

    A One Person Company (OPC) can voluntarily apply for strike-off under Section 248 of the Companies Act, 2013. This option is available if the company no longer has any business activity and meets specific conditions.

    Eligibility Criteria for Voluntary Strike-Off

    • The OPC has not commenced or has ceased its business operations for at least 2 consecutive years.
    • The company has no outstanding liabilities (including debts, dues, and taxes).
    • The company has filed all its mandatory documents and returns with the Registrar of Companies (RoC) up to the date of application.

    Procedure for Voluntary Strike-Off

    1. Board Resolution: The sole director of the OPC must pass a Board resolution to approve the decision to close the company and apply for strike-off.
    2. Clearance of Liabilities: Ensure that all outstanding liabilities (if any) are cleared. This includes paying off creditors and settling any dues.
    3. Filing with RoC: File Form STK-2 (Application for Striking Off) with the Registrar of Companies (RoC), along with the following documents:
      • A statement of accounts confirming that the company has no assets and liabilities.
      • A No Objection Certificate (NOC) from creditors, if applicable.
      • Affidavits from the director(s) confirming that the company has not conducted any business for the last 2 years.
    4. RoC Processing: Once the application is submitted, the RoC will review the details. If the application is complete and meets the legal requirements, the RoC will issue a strike-off order.
    5. Publication in Gazette: The strike-off order will be published in the Official Gazette, officially marking the removal of the company’s name from the register.

    Effect of Voluntary Strike-Off

    • The OPC will cease to exist as a legal entity.
    • The company will no longer be required to file annual returns, financial statements, or comply with other statutory requirements.
    • Any assets held by the company will automatically become the property of the government.

    2. Strike-Off by the Registrar of Companies (RoC)

    The Registrar of Companies (RoC) can initiate a strike-off process if the OPC fails to meet regulatory obligations or is found to be inactive.

    Conditions for RoC-Initiated Strike-Off

    • The OPC has not carried on any business for 2 consecutive years.
    • The company has failed to file annual returns or financial statements for two consecutive years.
    • The OPC has not responded to notices from the RoC regarding compliance.

    Procedure for RoC-Initiated Strike-Off

    1. Show-Cause Notice: The RoC issues a show-cause notice to the company, giving it an opportunity to explain why it should not be struck off. The company must respond within the prescribed period (usually 30 days).
    2. Failure to Respond: If the company fails to respond or justify its inactivity or non-compliance, the RoC proceeds with the strike-off process.
    3. Strike-Off Order: After reviewing the matter, the RoC issues a strike-off order and publishes the notice in the Official Gazette.

    3. Consequences of Strike-Off

    • The OPC is removed from the Registrar of Companies (RoC) register and ceases to exist as a legal entity.
    • The company will no longer be liable to file annual returns or financial statements.
    • Any assets or property of the company will vest with the government.
    • The company’s directors will be prohibited from using the company’s name for any future business activities.