Updated on June 19, 2025 02:53:20 PM
A one-person company (OPC), established under the Companies Act of 2013, operates with a single individual as its sole shareholder and director. Similar to other company structures, the closure of an OPC(One Person Company) involves specific processes to wind down operations, settle liabilities, distribute assets, and formally deregister with the Ministry of Corporate Affairs (MCA).
A One Person Company (OPC) is a type of company in India that can be formed by a single person. OPCs are similar to private limited companies (PLCs) in many ways, but there are some key differences. One of the main differences is that OPCs do not have a separate legal existence from their owners. This means that the owner of an OPC is personally liable for all of the company's debts and liabilities.
OPC closure is the process of winding up and dissolving an One Person Company. There are two ways to close an OPC: voluntary winding up and compulsory winding up. Voluntary winding up is initiated by the OPC's sole member or director, while compulsory winding up is initiated by a court order. The steps involved in each process vary, but both ultimately result in the dissolution of the OPC and its removal from the register of companies.
The closure of an OPC(One Person Company) encompasses the organised cessation of its operations, resolution of debts and obligations, equitable distribution of assets, and the official deregistration with the Ministry of Corporate Affairs (MCA). This process is typically initiated when the company faces financial challenges, undergoes structural changes, or the sole director/shareholder decides to cease operations. The closure involves convening a general meeting, appointing a liquidator, settling debts, distributing assets, filing a closure application, and obtaining a closure certificate.
The detailed process of winding up or closure of a private limited company is as follows:
The initial step in closing a One Person Company(OPC) is to convene a General Meeting. The sole director/shareholder must call for a Special General Meeting (SGM) to address the resolution of winding up. The notice for the SGM should be sent to the sole shareholder at least 14 days prior to the meeting date.
The sole shareholder or the court has the authority to appoint a qualified individual as a liquidator. The liquidator is responsible for managing assets, settling debts, and ensuring a smooth transition to closure. Their duties include taking possession of assets, converting them into cash, settling debts, and distributing remaining assets among the sole shareholder.
The liquidator meticulously identifies, verifies, and lists all outstanding debts and liabilities. This involves thorough examination of financial records, communication with creditors, and ensuring all financial obligations are accounted for. Creditors are notified of the company's winding up, and they are invited to submit claims within a specified timeframe.
A qualified valuer assesses the company's assets to ensure fair distribution among the sole shareholder. After settling debts, the liquidator distributes any remaining assets in accordance with the shareholder's interest. A structured procedure is followed to guarantee each shareholder receives their rightful share.
The liquidator files Form INC-20 with the Ministry of Corporate Affairs (MCA) to deregister the OPC officially. This form serves as the official notification to the MCA of the company's intention to close, triggering the deregistration process. The MCA reviews the closure application and supporting documents for compliance.
Upon successful completion of the winding-up process and compliance verification, the MCA issues a closure certificate. This certificate formally signifies the end of the OPC's existence, providing legal recognition of its dissolution. The liquidator retains records related to the winding-up process for a minimum of eight years from the closure certificate's issuance.
Here is the list of documents required forClosure of One Person Company are:
The total cost of closure of One Person company(OPC) is ₹ 21,999 which includes government fee and professional filing fee of Professional Utilities.
| One Person Company(OPC) Closure | Fees |
|---|---|
| Government Fee | ₹10,000 |
| Professional Fee | ₹11,999 |
| Total Fee | ₹21,999 |
For the purpose of company closure a professional fee is charged by the company secretary, and an additional fee for Documents Processing and auditing(Notary and Stamp Paper).
There are many reasons why a company might choose to close down. Some of the most common reasons include:
At Professional Utilities, we leverage our industry knowledge and expertise to help businesses navigate complex regulations, minimize risks, and optimize operations for maximum efficiency and profitability.
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Conclusion
In conclusion, the closure of a One Person Company(OPC) in India involves a structured and multifaceted process. Factors such as voluntary or compulsory winding up and compliance with regulatory requirements play a crucial role. Seeking professional advice is essential to ensure correct procedures and adherence to laws and regulations issued by the Ministry of Corporate Affairs. The closure of One Person company(OPC) is a complex procedure that involves filing various forms and following the complete winding up procedure as prescribed by the Ministry of Corporate Affairs.
Voluntary winding up is initiated by the sole shareholder/director, while compulsory winding up is initiated by a court order. Voluntary winding up is typically used when the OPC is solvent and the sole director/shareholder decides it is in the company's best interest to close down. Compulsory winding up is used when the OPC is insolvent with no prospects of paying off debts.
The duration varies based on the complexity. Voluntary winding up may take 3 to 12 months, while compulsory winding up may take 6 to 18 months.
The costs vary based on size and complexity. The cost of OPC closure is 21,999 with Professional Utilities.
Yes, in both voluntary and compulsory winding up, a liquidator must be appointed to oversee the process, responsible for managing assets, settling debts, and distributing assets to the sole shareholder.
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