A Complete Guide on OPC Compliance Requirements and Checklist

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One Person Company, shortly known as OPC, is a kind of company established under the Companies Act, 2013 for the purpose of enabling a solo Entrepreneur to begin and manage the limited liability entity. The main purpose of the OPC establishment is to support lone individual Enterprises. Typically, OPCs have a low turnover compared to private limited companies. As a result, the requirements of OPC compliance are lesser than those of private limited companies. Besides this, OPCs mandatorily need to follow up with every compliance.

What is One Person Company as per Companies Act, 2013?

Section 2 (62) of the Companies Act, 2013 says a company with only one person as its member or sole owner falls under the criteria of One Person Company or OPC. Further, an OPC is owned and administered by one person only. Moreover, all the members of an OPC are the followers to its memorandum of association (MOA) or its shareholders.

Further, it is significant to mention that an OPC can only be incorporated as a Private Company which means that all the provisions applicable to a Private Limited Company will be applicable to a One Person Company.

Why is it Essential to Comply with Annual Compliance in OPC?

Running a One-Person Company is not that easy. Often, the person’s thinking to start a company is unaware of the important compliances that are mandatorily required to be performed, failing to comply with the same, can lead the company to pay hefty penalties. Apart from penalties, the company and its directors may also be required to face undertaking and further investigation.

Thus, it is worth mentioning that a One-Person Company becomes eligible for performing the annual compliances right from the time of its incorporation. Non-compliances create various hindrances for the company in the form of penalties and fines. To prevent such situations, it is of utmost importance to be aware and comply with the applicable compliances. For One-Person Company, it is required to publish its accurate financial status to the Shareholders and investors.

Advantages of One-Person Company Compliances

There are various benefits of a One Person Company such as-

  • Limited liability protection,
  • Increase the opportunity to get the fund from financial sponsors and,
  • Continuous existence

To enhance the confidence of the investor, the member of the OPC must comply with-

  • Companies Act,
  • Income tax Act and GST Compliances.

From the year 2018, the annual compliance requirement has been increased now for OPC. Notwithstanding the ROC compliances, Companies need to submit annual filing forms each year by 30th September. From the year 2018, the regular fundamental duties have been expanded now for OPC Companies. Below mentioned are the advantages of performing annual compliances of One Person Company.

  • Simple To Raise Support From Financial Speculator: Proper annual compliances of a company including OPC, enhances the confidence of Financial Speculator and makes it simple to raise support from a financial speculator.
  • Provides Active Status: Proper and timely compliances help in maintaining the active status of the company.
  • Avoids Hefty Penalties: Non compliances often result in hefty penalties and Fine. Proper annual compliances help in avoiding the hefty penalties.

One Person Company Annual Compliance

FormParticulars of Compliance
MBP-1  Every director at each financial year shall submit this for disclosure of the director’s interest in another entity. 
DIR-8  In OPC the directors of the company have to file a declaration about non-disqualification.  
MGT-7  OPC shall file its Annual Return within 180 days from the end of financial year. Annual Return will be for the period 1st April to 31st March. 
AOC-4  The Company is required to file its Balance Sheet, P & L Account and Directors ‘Report in this form and also auditor’s report. It has to be filed within 180 days from the end of the financial year.  
ADT-1  The Auditor in OPC will be appointed for 5 (Five) years and form ADT-1 will be filed for 5-years appointment. It shall be filed within 15 days of AGM.  

Section 173(5) of the Companies Act, 2013 requires that a One Person Company must conduct at least one board meeting (BM) in each half of the calendar year. This simply means that one meeting is obligatory to be conducted between the period from January to June and another meeting between the period from July to December. Further, the time gap between two board meetings must not be less than the period of 90 days. However, if in case the company has only one director then in that case such meeting requirement does not arise at all.

Further, an OPC is mandated to hold its Annual General Meeting (AGM) as provided under section 139 (1) of the Companies Act, 2013 to appoint a Statutory Auditor. Furthermore, such an auditor must hold the office from the conclusion of the first AGM (Annual General Meeting) to the conclusion of the sixth Annual General Meeting.

Other Compliances

  • Directors’ Report- Director shall contain details of information required for small companies.
  • Circulation of Financial Statement & other relevant Documents– Company shall send to the Members of the Company approved Financial Statement, Directors ‘Report and Auditors’ Report at least 21 clear days before the date of AGM.
  • Statutory Register- Company shall maintain mandatory registers: Director register, director shareholding register and related party transaction register.

Documents required for the Annual Compliance of One Person Company

The Below-mentioned documents are required for Annual Compliances of One Person Company-

  • Receipts of Purchases and Sales and invoices of expenses incurred during the year
  • Particulars of Bank Statements from 1 April to 31 March for all bank accounts in the name of the Company.
  • Particulars of GST returns filed (If Any)
  • Particulars of TDS Challans Deposited and TDS Return filed (If Any).
  • Balance sheet and P&L Account
  • Financial statements
  • Directors report
  • Details of the Member
  • Details of Directors

Conclusion

Running an OPC company with all requisite compliances is equally important as running a Public or Private Limited Company. To bring more transparency, every One Person Company incorporated under the Ministry of Corporate Affairs is required to follow all the requisite compliances. However, it is the responsibility of the directors of the company to make sure that all the necessary annual and event-based compliances are duly complied with.

In cases, you are not able to comply with the OPC compliance requirements, you can consult the best professionals in the market. Legal Window ensures timely compliance at nominal charges. Therefore, don’t delay, contact us.

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