An OPC or One-person Company is a type of company that is owned and managed by a single individual. Section 2(62) of the Companies Act 2013 defines an OPC as a company with only one member. The management of an OPC is also solely controlled by one person who holds 100% of the shares in the company. In India, OPC can only be registered as a Private Limited Company, which means that all the legal provisions applicable to Private Limited Companies also apply to OPCs. This includes the need for OPCs to comply with specific annual provisions for Annual Compliance.
As a One Person Company (OPC) in India, it is essential to comply with the government's annual compliance requirements to ensure that your company remains compliant with all the applicable laws and regulations. At IndiaFilings, we understand the importance of Compliance and are committed to helping One Person Companies meet their annual compliance requirements. Our team of experts is always available to assist you with any compliance-related queries and provide timely and accurate advice. Contact us today to learn more about our annual compliance services for One Person Companies.
One Person Company (OPC) is a company with only one individual as its member or shareholder. OPC registration is carried out when only one member or promoter exists for the business. This type of registration is preferred by many entrepreneurs over sole proprietorship businesses due to the numerous advantages that OPCs offer.
One Person Company (OPC) Compliances refer to the legal requirements that a company with a single owner must fulfill to maintain its active status as a separate legal entity. Every year, all registered OPCs must file an annual return and audited financial statements with the Ministry of Corporate Affairs (MCA), regardless of their turnover. These filings are used to report the company's activities and financial data for the previous financial year. The annual filing deadline depends on the Annual General Meeting date. Failure to comply with these requirements can result in the removal of the company's name from the RoC's register and the disqualification of its directors. MCA has taken strict action against non-compliance in the past.
Running a One-Person Company is not a simple task, as many individuals starting a company may not be aware of the mandatory compliances that need to be fulfilled. Failing to comply with these regulations can lead to hefty penalties and may result in the company and its directors facing scrutiny and further investigation.
It is worth noting that One-Person Companies are required to perform annual compliances from the time of their incorporation, and non-compliance can create various hindrances for the company in the Form of penalties and fines. Therefore, it is essential to be aware of and comply with the applicable regulations to avoid such situations. Additionally, One-Person Companies must provide accurate financial information to shareholders and investors.
One-Person Company (OPC) compliance has several benefits that include limited liability protection, increased opportunities to get funds from financial sponsors, and continuous existence.
Compliance with the Companies Act, Income tax, and GST helps to enhance investor confidence in the company
The following are some of the advantages of performing annual compliances for One-Person Companies:
The mandatory annual compliances of a One-Person Company (OPC) are as follows:
Failure to comply with these annual compliances may attract hefty penalties and fines and may even lead to the deregistration of the OPC. Therefore, OPCS must ensure they comply with these mandatory annual compliances yearly.
According to the Companies Act 2013, Section 173 mandates that a One-Person Company must conduct a minimum of one Board meeting annually. These meetings should be spaced out at least 90 days apart from each other and held every six months. It's important to note that the provisions of Sections 173 and 174 regarding the quorum of meetings of the Board of Directors do not apply to a One-Person Company with only one director on its board.
In non-compliance, the company will be subject to a penalty of Rs. 25,000/-, while the officer in default will be charged with a penalty of Rs. 5,000/-
As per Section 139 of the Companies Act, a One Person or Company must appoint an Auditor. A Chartered Accountant firm shall audit the company's accounts, and the Auditor will verify the books of accounts and issue an Audit report.
It's important to note that the provision regarding the rotation of the Auditor does not apply to a One Person Company.
Every One Person Company must file their Annual Return within 180 days from the end of the Financial Year. The Annual Return should include details about the company's shareholders or members and its directors.
The filing process requires the submission of Form MGT-7, the Annual Return form. OPCs need to ensure that this Form is filed within the specified timeline of 180 days from the end of the financial year.
One Person Company must file Financial Statements, which reflect the company's finances and include the Balance Sheet, Statement of Profit and Loss Account, and Director Report.
The submission of Form AOC-4 for Financial Statements is mandatory, and it should be filed within 180 days from the end of the financial year.
In each financial year, the directors of the OPC must disclose any interest they have in other entities in the first meeting of the Board of Directors, using Form MBP-1.
Penalty: Any Director in default may be subject to imprisonment for a term of up to 1 year.
To comply with regulations, individuals holding DIN as of March 31st of the financial year must submit Form DIR-3-KYC for the respective financial year by September 30th of the immediate next financial year.
The Form DPT-3 must be filed annually by every company, providing the Return of deposits and particulars that are not considered as deposits as of March 31st. The deadline for filing this Form is on or before June 30th.
According to Section 88 of the Companies Act 2013, One Person or Company must maintain statutory registers. Additionally, OPCs must comply with certain event-based requirements, including:
Under OPC Statutory Audit, CA Firm will give review report certification. OPC utilizes form AOC 4 to record their yearly fiscal summaries to ROC. A massive penalty of Rs 100 daily on delay in documenting Form AOC 4 is levied. Moreover, a sum of Rs. 1000 every day of default is charged from the organization, which can go the most extreme up to Rs. 10, 00,000.
All private or public companies are obligated to make Income Tax Returns Filing. Each OPC enlisted in India needed to file ITR. ITR is an essential requirement for annual Compliance for OPC regardless of whether OPC has not.
An OPC (One Person Company) must file its income tax returns (ITR) every year by the due date, usually July 31st for individuals and September 30th for businesses. The ITR filing process involves reporting the company's income, expenses, and deductions for the financial year to the Income Tax Department.
Amount of Rs. 10000/ as a fee will be imposed regarding non-filing of ITR.
The OPC must also obtain and maintain a valid Permanent Account Number (PAN), which is used to identify the company for tax purposes.
An OPC (One Person Company) registered under GST (Goods and Services Tax) must file regular returns to comply with the GST laws. GST returns are filed online through the GST portal, and the frequency of the returns depends on the turnover of the OPC.
An OPC with an annual turnover of up to Rs. 5 crores must file quarterly returns, while those with a turnover above Rs. 5 crores must file monthly returns. The GST returns filed by the OPC include details of its sales, purchases, and taxes paid and collected. The returns must be filed within the due date specified by the GST laws to avoid penalties and interest charges.
Apart from regular returns, an OPC may also be required to file an annual return and get its accounts audited if its annual turnover exceeds Rs. 2 crores. An OPC should maintain accurate and up-to-date records of its transactions to ensure timely and accurate GST compliance. Seeking the guidance of a qualified GST professional can help an OPC comply with the GST laws and avoid any legal consequences.
IndiaFilings Ledgers Platform for OPC is an online accounting and bookkeeping software that allows OPCs to manage their financial transactions and comply with regulatory requirements. The software is cloud-based, meaning it can be accessed from anywhere with an internet connection.
Overall, the Ledgers Platform for OPC is a comprehensive solution for OPCs looking to manage their finances and comply with regulatory requirements.
The Annual Compliance of a One Person Company requires several documents to be submitted, including:
These documents are necessary to comply with the legal requirements and regulations of the Companies Act 2013.
At IndiaFilings, we have a team of well-trained experts to assist you throughout the Annual Compliance process of your one-person company. Our team of experts will guide and assist you in the compliance process, ensuring your work's timely and effective completion. If you have any queries related to Annual Compliance and related services, our experienced and trained professionals at IndiaFilings are always ready to help. You can contact us, and our team of experienced professionals will provide you with timely updates about the process and get your job completed efficiently.
Many small businesses pay lakhs in penalty every year to the Government for late filing various statutory returns. Such penalty or late fee paid is not tax deductible and is a drain on profitability. At IndiaFilings, our mission is to provide the most affordable services to our customers and help them avoid all late fee.To achieve our mission - we have built enterprise grade technology to help you proactively know the upcoming compliance and avoid penalty.Checkout our compliance services below, talk to an Advisor and stop paying unwanted late fees.
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Last updated: Apr 20, 2023
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Annual Compliance - OPC FAQ's
Who can form an OPC in India?
What is a One-Person Company (OPC)?
What are the compliance requirements for an OPC?
What is the Mandatory Annual Compliances of a One-Person Company?
What is the minimum capital requirement for an OPC?
What are the annual compliances for an OPC?
Can an OPC convert into a Private Limited Company?
What is the penalty for non-compliance by an OPC?
Can an OPC have more than one director?
Is it mandatory to have a Company Secretary for an OPC?
Can an OPC have branches in multiple locations?
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