Close a One Person Company

Process for Voluntary Strike Off

Step	Description
STEP (1)	Hold a Board Meeting to discuss and to decide the following: Authorize a director for filing an application for strike-off of the company and using his DSC for the same under Section 248(2) of Companies Act, 2013. Paying off all the liabilities before holding an Extra-Ordinary General Meeting. For closing the Bank Account of the company.
STEP (2)	Take shareholder approval for the closure of the One Person Company: By taking consent. Or by passing a resolution in the General Meeting of the shareholders.
STEP (3)	Closure of all the associated bank accounts of the company and surrendering the Registrations or Licenses under any law like GST, IEC etc.
STEP (4)	Check that all the financial statements and annual returns are filed with the Registrar of Companies in their respective forms i.e., AOC-4 and MGT-7/7A up to the end of the financial year in which the company ceased to carry out its business operations. Filing of income tax returns of the company and if any filings are due, then complete the same.
STEP (5)	Take No-Objection Certificates from the creditors only if there are any subsisting liabilities.
STEP (6)	Indemnity Bond (STK-3) To be given individually by each director. It must be duly signed, stamped on Rs. 500 stamp paper by each director and notarized. And Affidavit (STK-4) To be given individually by each director. It must be duly signed, stamped on Rs. 100 stamp paper by each director and notarized.
STEP (7)	Filing of E-Form STK-2 with all the necessary attachments and government fees of Rs. 10,000. Kindly note only two resubmissions are allowed in this form, so remember to attach all the necessary documents.
STEP (8)	Strike off by the ROC: If ROC deems fit after examining the form, it will notify its intention of striking off the company in the official gazette (STK-7). This notification will remain in the official gazette for a month, and if no objection is received from the general public, then the ROC will change the status of the company to "Struck-Off" in the master data and the name of the company will be removed from the Register of Companies.

Companies Which Cannot Apply for Strike Off Under Section 248(2) of the Companies Act, 2013

• Listed Companies
• Companies accepting any public deposits which are outstanding.
• Companies registered under Section 25 of the Companies Act, 1956 or Section 8 of the Act.
• Companies against which any case for prosecution is pending in a Court of law.
• Companies which haven’t furnished the follow-up instructions on any report under section 208 of the Act.
• Companies delisted on account of non-compliance of listing regulations, listing agreement or any other statutory laws.
• Vanishing companies.

Second Method: Voluntary Winding Up

This process is initiated by the shareholders of the company, including the appointment of a liquidator and the rest of the steps in the process.

The shareholder of the company can start the winding up of the company anytime only if there are no secured or unsecured creditors or employees on roll. After settling the dues, it is necessary to close all the Company bank accounts. The GST registration also needs to be surrendered in the winding up of the company.

The Winding up of a One Person Company can be done voluntarily by the members of the Company, if:

• The company passes a special resolution for winding up the Company.
• The Company in general meeting passes a resolution which requires a company to wind up voluntarily as a result of the expiry of the period of its duration, as per the Articles of Association or on the occurrence of any event in respect of which the articles of association provide that the company should be dissolved.

The One Person Company which wants to wind up can apply under the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017.

• Passing of Special Resolution.
• Declaration of Solvency duly verified by an Affidavit by the Majority of Directors of the Company on Stamp paper of Rs.100/- (In case of Indian Directors) and in the case of Foreign Directors, where the Directors are signing Declaration in a Foreign Country, such Declaration to be duly notarized and apostilled.

Process for Voluntary Winding Up

Step	Description
STEP (1)	Declaration of Solvency duly verified by an affidavit by the majority of directors.
STEP (2)	Convene a Board meeting to discuss and approve the following: Voluntary winding up of the Company, subject to the approval of the Members in the General Meeting Appointment of an Insolvency professional as Liquidator subject to the approval of Members in the General Meeting To consider and approve Declaration of Solvency and affidavit by the directors of the Company To fix day, date, time, and to send notice and agenda for General Meeting
STEP (3)	Convene a General Meeting to discuss and approve the following by way of a special resolution: Voluntary winding up of the company The appointment of an Insolvency professional as Liquidator
STEP (4)	Intimate to ROC within 7 days of approval of the resolution by members/subsequent approval by creditors. MGT 14: a. One for the Board resolution b. One for the special resolution passed in the general meeting GNL-2: a. For Declaration of Solvency & Appointment of Liquidator
STEP (5)	The Liquidator needs to inform the IBBI within 7 days of his appointment date. i.e., within 7 days from the general meeting in which the appointment of the liquidator is approved by the members of the company.
STEP (6)	Make a public announcement in Form A of Schedule I within 5 days from his appointment. Publish in one English Newspaper and one Regional Language Newspaper having wide circulation where the registered office and the principal office, if any, of the Company is situated. Post on the website of the company (if any) Liquidator shall intimate the IBBI about the public announcement.
STEP (7)	Opening of bank account for liquidation in the name of the company—“VOLUNTARY LIQUIDATION” in the scheduled commercial bank within one month of passing of the special resolution in the general meeting.
STEP (8)	The Liquidator should intimate the Income Tax Department regarding the voluntary winding up and take the No-Objection Certificate from the Income Tax Department.
STEP (9)	The liquidator shall submit a Preliminary Report to the corporate person within 45 days from the liquidation commencement date.
STEP (10)	Collation of claims by the liquidator from Operational Creditor, Financial Creditor, Workmen and Employees, any other stakeholders (if any), Secured Creditor, Claims through Bills of Exchange & Promissory Notes.
STEP (11)	Verification of Claims & preparation of list of stakeholders by the liquidator within 45/15 days (Refer note) from the last date for receipt of claims. (15 days is applicable in case no claims from creditors have been received till the last date for receipt of claims).
STEP (12)	Realization of Assets of the company.
STEP (13)	Distribution of Proceeds within 30 days from the receipt of the amount to the stakeholders.
STEP (14)	Preparation of Final Report by the Liquidator and it needs to be sent to: Registrar of Companies in E-Form GNL-2 IBBI via Email/Courier NCLT via physical filing
STEP (15)	Application for Dissolution of One Person Company by Liquidator to the NCLT and NCLT shall pass an order for the dissolution of the Company. And a copy of this order to be filed within 14 days with the Registrar of Companies (ROC).

Frequently Asked Questions (FAQ's) on Voluntary Winding Up of Company

Corporate entities are eligible for voluntary winding up. A corporate person can be a Company or a Limited Liability Partnership (LLP) or any other entity incorporated with limited liability under any applicable law.

This is the process of ending the corporate entity of the company.

In India, Voluntary winding up is governed by Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017.

Primary reasons include the company being unable to pay its debts.

This simply means removal of the company’s name from the Register of Companies maintained by the Registrar of Companies.

In India, Strike Off is governed by Section 248 of the Companies Act, 2013 and Companies (Removal of Names of Companies from the Register of Companies) Rules, 2015.

Yes, there are two methods: Voluntary Strike Off initiated by the company and Involuntary Strike Off initiated by the Registrar of Companies.

Primary reasons are:

• A company has failed to commence its business within one year of its incorporation.
• A company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company.

E-form STK-2 with Rs. 10,000 government fees.

Voluntary strike off is initiated by the company itself when it wants to close its business while involuntary strike off is initiated by the Registrar of Companies.

• Board Resolution authorizing director to file application for strike off in STK-2 E-form using DSC.
• Copies of consent by the shareholder or Copy of Special Resolution passed by the shareholder and certified by all the directors.
• Self-Attested KYC (PAN & AADHAR) of all the directors and shareholders duly certified by a whole time practicing professional viz Chartered Accountant/Company Secretary/Cost Accountant.
• Affidavit (STK-4) signed by all directors and duly stamped and notarized.
• Indemnity Bond (STK-3) signed by all directors and duly stamped and notarized.
• Statement of Accounts (STK-8).
• Bank Account Closure Certificate.