One Person Company (OPC) Compliance

An OPC or One-person Company is a type of company that is owned and managed by a Single Person. Section 2(62) of the Companies Act 2013 defines an OPC as a company have 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 applies to OPCs. This includes the need for OPC compliance with specific annual provisions for OPC annual compliance.

At DisyTax, we understand the importance of OPC Compliance requirements and are committed to helping One Person Companies to 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 OPC annual services for One Person Companies.

One Person Company (OPC)

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 Compliances

One Person Company (OPC) Compliances refer to the legal requirements that a company with a solo owner must fulfil 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 OPC compliance filings are used to report the company’s activities and financial data for the particular financial year. The annual filing deadline depends on the Annual General Meeting date. Failure to comply with OPC requirements can lead to the company’s name being removed from the RoC’s register and the disqualification of its directors.

Importance of OPC Annual Compliances

Running a One-Person Company is not a simple task, as many individuals starting a company may not be aware of the mandatory compliance for OPC that need to be fulfilled. Failing to comply with these regulations can lead to heavy 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 OPC compliance requirements as other company compliances, and non-compliance can create various difficulties for the company in the form of penalties and fines. Therefore, it is essential to be aware of and comply with the applicable OPC annual compliance regulations to avoid such situations.

Benefits of OPC MCA Compliances

One-Person Company (OPC) compliance has several benefits that include limited liability protection, increased opportunities to get funds from financial sponsors, and continuous existence.

The following are some of the advantages of performing annual compliance for OPCs:

• Easy to raise funds from financial investors – Proper OPC annual compliances, including for OPCs, enhance the confidence of financial investors and makes it easy to raise funds from them.
• Maintains active status – Timely and proper OPC Compliance helps maintain the company’s active status.
• Accurate data collection: Annual compliance for OPCs ensures that the data collected for the OPC annual compliances are accurate and true.
• Avoids heavy penalties: Non-compliance often results in hefty penalties and fines. Proper annual OPC compliance requirements help in avoiding these penalties.

Mandatory Compliance for OPC Annual Filing

The mandatory compliance for OPC annual filing are as follows:

·        Conducting Annual General Meeting (AGM):

OPCs must conduct an AGM within six months from the end of the financial year. It is mandatory to hold an AGM even if only one director in the OPC exists to comply with OPC annual compliance regulations.

·        Filing Financial Statements:

OPCs must prepare financial statements such as balance sheets, profit and loss, and cash flow statements and file them with the Registrar of Companies (ROC) within 30 days of the AGM.

·        Filing Income Tax Returns:

OPCs must file income tax returns by July 31st of each year.

·        Filing Annual Return:

OPCs must file an annual return with the MCA within 60 days of the AGM.

·        Statutory Audit:

OPCs must conduct a statutory audit of their financial statements by a qualified Chartered Accountant.

·        Maintenance of Statutory Registers and Records:

OPCs must maintain various statutory registers and records, such as the register of members, register of directors, and minutes of board meetings.

Failure to comply with these annual OPC compliances may attract heavy penalties and fines and may even lead to deregistration of the OPC. Therefore, OPCs must ensure they comply with this mandatory compliance for OPC annual filing.

Conducting the Board Meeting

According to the Companies Act 2013, Section 173 mandates that a One-Person Company must conduct a minimum of one Board meeting annually. The gap between board meetings for a One Person Company (OPC) in India should be at least 90 days. This means that there should be at least one board meeting in each half of the calendar year. 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.

Appointment of Auditor for OPC

As per Section 139 of the Companies Act, 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.

Filing of Annual Return of OPC

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 OPC compliance 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.

Financial Statement of OPC

One Person Company must file financial statements that reflect the company’s finances, including the balance sheet, statement of profit and loss account, and director report to comply with OPC annual compliance regulations.

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. The due date to file AOC-4 for OPC is 27th September every year.

Disclosure of Interest in Other Entities

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: The director in default shall be punishable with imprisonment up to 1 year, or a fine up to Rs 1 lakh, or both.

KYC of the Director of the company

For annual compliance for OPC, 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.

Filing the Form DPT-3 for OPC

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. This is also one of the important OPC annual compliance requirements.

Penalty for Late Filing Annual Return of OPC

Failure to comply with MCA Annual Return filing for OPC can lead to a late fee of INR 200 per day, and for DIN KYC, it is INR 5000.

Preparing the Statutory Register

According to Section 88 of the Companies Act 2013, One Person or Company must maintain statutory registers. Additionally, OPC compliance with certain event-based requirements, including:

• Share Transfer
• Director Appointment or Resignation
• Change in Nominee or Bank Signatories
• Change in Auditor.

Under OPC Statutory Audit, CA Firm will give review report certification. OPC utilizes form AOC 4 to record their financial year summaries to ROC. A massive penalty of Rs 100 daily on delay in filing 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.

Income Tax Filing

All private or public companies are obligated to make Income Tax Returns Filing. Each OPC enlisted in India needed to file ITR. ITR is one of the essential for annual OPC compliance requirements 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.

The OPC must also obtain and maintain a valid Permanent Account Number (PAN), which is used to identify the company for tax purposes.

GST Filing for OPC

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.

Documents Required for the Annual Compliance of One Person Company

The Annual OPC Compliance requires several documents to be submitted, including:

• Purchases and Sales Invoices, along with invoices of expenses incurred during the year
• Bank statements from April 1st to March 31st for all bank accounts in the name of the company
• Details of GST returns filed (if applicable)
• Details of TDS challans deposited and TDS return filed (if applicable)
• Balance sheet and profit & loss account
• Financial statements
• Director’s report
• Details of the member/shareholder
• Details of directors

These documents are necessary for OPC compliance with the legal requirements and regulations of the Companies Act 2013.

Why Choose DisyTax for OPC Compliance?

At DisyTax, we have a team of well-trained experts to assist you throughout the Annual Compliance for OPC process of your one-person company. Our team of experts will guide and assist you in the compliance and mandatory compliance for OPC process, ensuring your work’s timely and effective completion. If you have any queries related to Annual Compliance for OPC and related services, our experienced and trained professionals at DisyTax are always ready to help.

You can contact us, and our team of experienced professionals will provide you with timely updates about the OPC compliance process and help you complete your job efficiently.