OPC Compliance Requirements
OPC Compliance Requirements
One Person Company (OPC) is a type of company introduced in the Companies Act, 2013 to enable a lone Entrepreneur to start and manage a limited liability entity. OPC was established to support single person Enterprises that are small businesses with a sales turnover of of less than 200 lakhs. So, the compliance requirements for OPC are also limited when compared to a private limited company. In this article, we look at post incorporation OPC compliance requirements.
After registration of a One Person Company (OPC), it is advisable to purchase the following stationary for use with OPC compliance matters.
Name Board: All companies including a OPC is required to paint or affix the name of the company and address of its registered office outside every office or place in which it carries on business.
Company Rubber Stamp: A round rubber stamp bearing name of the company and a straight rubber stamp bearing the name of the company along with designation of the authorised signatory can be purchased. Company rubber stamp is required for executing various legal documents like Board Resolutions, bank account opening forms, cheques, etc.,
Letterhead: The name and registered office address of the OPC must be printed on all letterhead, invoices, notices and other official documents of the company.
Note: For a OPC, its important that the words ‘‘One Person Company’’ be mentioned in brackets below the name of the company, wherever its name is printed, affixed or engraved.
OPC PAN Application
The first step after incorporation of any corporate legal entity is obtaining OPC PAN card. PAN can be applied online after incorporation to receive the PAN allotment letter. The letter must then be signed by the OPC Director, sealed with company rubber stamp and couriered to the NSDL office. PAN Card will be issued in about 15 days after receipt of the hard copy PAN application from the applicant. The procedure for signing of PAN application is provided in the following video:
Opening OPC Bank Account
The process for opening bank account for a One Person Company is relatively simple when compared to proprietorship bank account opening. As a OPC is a corporate entity, no other additional tax registrations or documents are required to open a bank account for a OPC. As per Reserve Bank of India’s KYC norms, the following are the documents required to open a current account in the name of a OPC:
- Self-attested copies of OPC Certificate of incorporation
- Memorandum of Association of OPC
- Articles of Association of OPC
- Resolution to open bank account for Company
- Copy of PAN allotment letter;
- Copy of the telephone bill;
- Identity proof of the Director
Documents submitted for opening of bank account must be self-attested with seal of the company. Hence, its important to obtain company seal and company letterhead after incorporation of the OPC.
Appointment of Auditor
All companies are required to appoint the first Auditor of the Company, a practising Chartered Accountant within 30 days of incorporation. In case of OPC as well, an Auditor must be appointed by the Director of the OPC for auditing of financial statements of the company.
OPC Annual General Meeting
All companies other than a OPC is required to hold an annual general meeting each financial year with not more than fifteen months elapsing between the date of one annual general meeting of a company and that of the next. However, in case of a OPC where there is only one director on the Board of Directors, then it is sufficient for the resolution by one Director be passed and entered in the minutes-book. The signed and dated resolution by Director of a OPC is deemed to be the meeting of the Board of Directors for all the purposes under the Companies Act. Also, provisions relating to quorum for meetings of Board does not apply to a OPC where there is only one Director on its Board of Directors.
OPC Financial Statements
All companies are required to prepare and file with the ROC, the following financial statements:
- Balance sheet as at the end of the financial year;
- Profit and loss account;
- Cash flow statement for the financial year;
- Statement of changes in equity, if applicable;
- Explanatory note forming part of any document.
In case of a One Person Company (OPC), small company and dormant company, the requirement for cash flow statement has been removed. So, a OPC does not need to prepare or submit a cash flow statement as a part of its financial statements.