One Person Company is a separate legal entity just like Private Limited Company. The biggest advantage of a One Person Company is that there can be only 1 member/director in One Person Company. Since One Person Company is also a separate legal entity from its promoter, it provides limited liability protection to its sole shareholder, while continuing business and being easy to incorporate.
However, there will be times when one person's company may want to dissolve. The reason for the same, could be varying from Loss in Business to acquisition or merging by/with any other company. Just like other company's closure "One Person Company" can also be done by either winding up or striking off.
In winding up One Person Company, a separate meeting has to be kept with a majority of creditors. Then the reason for the dissolution should be discussed and should come to a decision. If decided for closure, then the management board would have to file a request with the Commercial Registrar regarding the members closure resolution and the minutes of the meeting. Moreover, after this the One Person Company would have to assign a liquidator to manage with the process of winding up of company. Winding up is a time consuming process.
Striking off is also known as Fast-track Exit Scheme(FTE scheme). The striking-off process can be carried forward with the STK-2 Form. Which has to be filed by ROC or by the company itself. Striking off is the process of removing the name from the records that the registrar has. But there are some pre-requisite conditions that should be met before striking off. The conditions are as follows:
1) The company should be a dormant company. There should not have been any business activities in the past 1 year.
2) It should not have any assets or liabilities. And you should get a NOC from your creditors as well.
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