Want to shut down your One Person Company? Learn the difference between strike-off and winding up, required documents, cost, and step-by-step process.
How to Close an OPC (One Person Company) in India: Complete Process
You registered your One Person Company with big plans, but somewhere along the way, the business stopped moving. Maybe you have taken up a full-time job, moved to another venture, or simply realised the OPC structure no longer fits your needs. Whatever the reason, one thing is certain: you cannot just stop filing returns and walk away.
An inactive, unclosed OPC does not quietly disappear. It keeps attracting compliance obligations, and if ignored, penalties and director disqualification can pile up quietly in the background until they surface at the worst possible time — like when you are trying to register a new company or apply for a loan. Properly closing your OPC is the only way to draw a clean line under it.
What is OPC Closure
Closing a One Person Company means formally removing it from the register maintained by the Registrar of Companies (ROC), so that it legally ceases to exist as a corporate entity. Under the Companies Act, 2013, and the rules framed under it, there are broadly two routes available to close down an OPC: strike-off and winding up.
Strike-off is the simpler, faster, and far more commonly used route for small or inactive companies. It involves applying to the Registrar of Companies using Form STK-2 to have the company's name removed from the register, typically because the company is not carrying on any business or has become defunct.
Winding up is a more formal, detailed legal process generally used when the company has ongoing liabilities, disputes, or complexities that cannot be resolved through a simple strike-off application. Winding up can be voluntary (initiated by the company itself) or ordered by a tribunal in certain circumstances, and it involves settling all debts, realising assets, and formally liquidating the company under court or tribunal oversight.
For most OPC owners whose company is simply inactive with no major pending liabilities, strike-off via STK-2 is the path typically used. Winding up becomes relevant mainly when the company's financial situation is more complicated.
Why It Matters: The Cost of Not Closing Properly
Many business owners assume that if they simply stop operating and stop filing returns, the company will eventually be struck off automatically by the ROC. While the ROC does have the power to strike off defunct companies on its own initiative, relying on this is risky and can backfire badly. Here is why proper closure matters:
- Non-filing of annual returns and financial statements attracts late fees that accumulate daily and can add up to a substantial amount over time
- Directors of a company that fails to file for a continuous period can face disqualification, which affects their ability to be directors in any other company
- An improperly closed company can create complications later if the same director wants to start a new venture, apply for loans, or pursue government tenders
- Outstanding tax dues, GST liabilities, or statutory dues do not simply vanish when a company stops operating — they remain a legal obligation until formally settled or the company is properly wound up
- A company that appears "active" but non-compliant on official records can raise red flags during due diligence for any future business dealings
Taking the proactive step of formally closing the OPC protects your personal compliance record as a director and prevents an old, forgotten company from causing problems years down the line.
Eligibility and Conditions for Strike-Off
Not every OPC can go through the simplified strike-off route. Broadly, the following conditions generally need to be satisfied:
- The company must not have commenced business within one year of incorporation, or must not have carried on any business activity for a specified continuous period preceding the application.
- The company should have no outstanding liabilities, or all liabilities must be settled/cleared before applying for strike-off.
- There should be no pending litigation involving the company that would be affected by its closure.
- All overdue statutory filings must generally be brought up to date before the strike-off application, including pending annual returns and financial statements, depending on the specific requirement at the time of application.
- The company should not have any pending inspection, inquiry, investigation, or prosecution initiated against it.
- Bank accounts must be closed, and a certificate confirming account closure is typically required as part of the application.
- Consent of the sole member (and nominee, in the case of an OPC) is required to proceed with the closure application.
If the company does not meet these conditions — for example, if it has unresolved debts or ongoing legal disputes — the formal winding-up route becomes necessary instead of strike-off.
Documents Required for Closing an OPC
To apply for strike-off of your OPC, you will typically need to gather:
- Board resolution approving the decision to apply for strike-off
- Consent of the sole member/shareholder of the OPC
- Statement of accounts showing the company's assets and liabilities, prepared close to the date of application, certified by a Chartered Accountant
- An affidavit from the director confirming the company has no liabilities or that all liabilities have been settled
- Indemnity bond from the director, indemnifying any losses that may arise post-closure
- Bank account closure certificate or a statement confirming no active bank account is being operated
- Copy of the latest filed income tax return, if applicable, and PAN of the company
- Statement regarding pending litigations, if any, confirming there is none
- Digital signature certificate of the director for filing the application online
- Form STK-2 duly filled with the prescribed government fee
Step-by-Step Process for Closing an OPC via Strike-Off
- Hold a board meeting and pass a resolution — Approve the proposal to close the OPC and authorise the director to file the necessary application.
- Settle all liabilities — Clear any pending dues, loans, statutory payments, or other liabilities before proceeding, since a company with outstanding liabilities cannot use the simplified strike-off route.
- Close the company's bank account(s) — Obtain a formal closure certificate or statement from the bank confirming the account has been closed.
- Prepare the statement of accounts — Get a Chartered Accountant to certify a statement of assets and liabilities not older than the prescribed period before filing.
- Prepare supporting documents — Draft the affidavit, indemnity bond, and consent of the sole member as required for the application.
- Clear pending statutory filings — Ensure annual returns and financial statements are filed up to date, as required under the applicable rules at the time of filing.
- File Form STK-2 with the Registrar of Companies — Submit the strike-off application online along with all supporting documents and the prescribed government fee.
- Respond to ROC queries, if any — The Registrar may raise clarifications or ask for additional information; respond promptly to avoid delays.
- Public notice and objection period — The ROC typically publishes a notice inviting objections from the public before finalising the strike-off, allowing creditors or other stakeholders to raise concerns.
- Receive the strike-off order — Once satisfied, the ROC will strike off the company's name from the register and publish this in the Official Gazette, formally closing the company.
Cost & Fees in 2026
The cost of closing an OPC through the strike-off route generally includes:
- Government filing fee for Form STK-2, prescribed under the Companies Act rules
- Professional fees for a Chartered Accountant to prepare the certified statement of accounts
- Professional/legal fees for drafting the affidavit, indemnity bond, resolutions, and managing the overall filing process
- Late filing fees or additional fees, if any annual returns or financial statements were pending and need to be filed before the strike-off application
- Bank charges, if any, for closing the account and obtaining the closure certificate
- Winding-up related costs, which can be significantly higher than strike-off costs, applicable only if the company must go through the formal winding-up process instead
Since government fees and any applicable penalty amounts are revised from time to time, please verify the current rate before filing rather than relying on previously seen figures.
Timeline
Closing an OPC through the strike-off route typically takes a few months from start to finish, factoring in the time needed to settle liabilities, close bank accounts, clear pending filings, and complete the ROC's own processing and public notice period. If the company has pending compliance issues or overdue filings that must first be resolved, the timeline can extend further. The formal winding-up route, when required, generally takes considerably longer than a straightforward strike-off, since it involves a more detailed legal process, potential tribunal involvement, and settlement of all liabilities under supervision.
Key Distinctions: Strike-Off vs Winding Up
- Strike-off (STK-2) is a simplified, faster administrative process used for companies with no significant assets, no liabilities, and no pending disputes; winding up is a more elaborate legal process used when the company has liabilities, disputes, or complex asset distribution to manage.
- Strike-off is generally initiated by the company itself through an application to the ROC; winding up can be voluntary or, in certain situations, ordered by the tribunal.
- Strike-off does not typically require appointment of a liquidator; winding up usually involves a liquidator who manages the realisation of assets and settlement of liabilities.
- Strike-off is significantly quicker and less expensive; winding up takes longer and involves higher professional and procedural costs given its detailed nature.
- A struck-off company can, in certain circumstances, be restored by an order of the tribunal if aggrieved parties apply within the prescribed period; the finality of winding up is generally more absolute once completed.
Common Mistakes Business Owners Make
- Assuming that simply not filing returns will lead to automatic closure, without realising this approach leads to mounting penalties and possible director disqualification instead.
- Applying for strike-off while liabilities are still outstanding, leading to rejection of the application by the Registrar.
- Not closing the company's bank account before applying, which is a mandatory requirement for the strike-off process.
- Failing to bring pending annual filings up to date before applying, causing the application to be returned or delayed.
- Ignoring pending litigation or disputes and attempting strike-off instead of pursuing the appropriate winding-up route where necessary.
- Not retaining proper documentation (affidavits, indemnity bonds, statement of accounts) even after closure, which can be needed later if any query arises.
- Not consulting a professional to check whether all eligibility conditions are genuinely met before filing, resulting in wasted time and repeated rejections.
FAQ
Can I close my OPC if it has never done any business since incorporation?
Yes, this is actually one of the most common and straightforward scenarios for strike-off, since a company that has not commenced business within a specified period after incorporation is generally eligible for the simplified STK-2 route, provided other conditions are also met.
What happens if my OPC has outstanding loans or dues?
If your OPC has unsettled liabilities, you generally cannot use the simple strike-off route. You would first need to settle those liabilities, or if that is not feasible, the company may need to go through the more detailed winding-up process instead.
Do I need to file pending annual returns before closing the OPC?
In most cases, yes. Overdue statutory filings typically need to be regularised before the ROC will process a strike-off application, since the Registrar expects the company's compliance record to be up to date at the time of closure.
How long does it take for the ROC to approve a strike-off application?
The timeline can vary depending on the completeness of your application and the ROC's processing load, but the overall process, including the mandatory public notice period, generally takes a few months from filing to final approval.
Can a struck-off OPC be revived later?
Yes, in certain circumstances, a company that has been struck off can be restored to the register through an application to the National Company Law Tribunal, typically within a specified period from the date of the strike-off order, if there are valid grounds for doing so.
What is the role of the nominee in closing an OPC?
Since an OPC is required to have a nominee, the nominee's awareness and, in some cases, consent may be relevant during the closure process, particularly around documentation and the affidavit process, since the nominee would otherwise step in if the sole member were unable to continue.
Is a Chartered Accountant mandatory for the OPC closure process?
A Chartered Accountant's certification is typically required for preparing the statement of accounts that must accompany the strike-off application, making their involvement effectively necessary for a compliant filing.
What is the difference between closing an OPC and simply making it dormant?
Applying for dormant company status keeps the company legally alive but with reduced compliance obligations, useful if you intend to revive it later. Closure through strike-off or winding up permanently removes the company from the register, which is appropriate when you have no intention of using the entity again.
How Legal Suvidha Makes This Effortless
This is exactly the kind of process where one wrong document, a mismatched detail, or a missed deadline turns into a rejection, a resubmission, or a running penalty. Legal Suvidha handles the whole thing end-to-end so you can focus on your business.
- Fixed, all-inclusive price quoted upfront — professional fee plus government fee, itemised, with no hidden charges appearing later.
- A dedicated Chartered Accountant / Company Secretary who owns your case from the first call to the final certificate.
- Proactive updates and deadline alerts at every stage — we do not disappear after payment.
- Trusted by 10,000+ founders with a 4.9/5 rating and a multi-disciplinary team of CAs, CSs and lawyers.
Talk to a Legal Suvidha expert today for a free consultation and an exact, transparent quote on WhatsApp — and get it done right the first time.
