Annual Compliance of One Person Company (OPC)
Deliverables - Timeline
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Deliverables
Form AOC-4
Form DPT 3
Timeline
2-3 months
(from receipt of all documents)
Annual Compliance of One Person Company (OPC)
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 OPC compliance 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 OPC requirements can lead to the company's name being removed from the ROC's register and the disqualification of its directors. The MCA has enforced strict action against non-compliance in the past.
Mandatory Compliance for OPC Annual Filing
The mandatory compliance for OPC annual filing are as follows:
1. 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.
2. 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.
3. Filing Income Tax Returns: OPCs must file income tax returns by July 31st of each year.
4. Filing Annual Return: OPCs must file an annual return with the MCA within 60 days of the AGM.
5. Statutory Audit: OPCs must conduct a statutory audit of their financial statements by a qualified Chartered Accountant.
6. 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 hefty penalties and fines and may even lead to the 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. 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.
Appointment of Auditor
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
Financial Statement
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
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 OPC Non-Compliance
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 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.
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.
Filing of Annual Return
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.
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 hefty penalties: Non-compliance often results in hefty penalties and fines. Proper annual OPC compliance requirements help in avoiding these penalties.
Documents Required for the Annual Compliance of One Person Company
The Annual OPC Compliance requires several documents to be submitted, including:
1. Receipts of purchases and sales, along with invoices of expenses incurred during the year
2. Bank statements from April 1st to March 31st for all bank accounts in the name of the company
3. Details of GST returns filed (if applicable)
4. Details of TDS challans deposited and TDS return filed (if applicable)
5. Balance sheet and profit & loss account
6. Financial statements
7. Director's report
8. Details of the member/shareholder
9. Details of directors
These documents are necessary for OPC compliance with the legal requirements and regulations of the Companies Act 2013.
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FAQs
Government fees for annual compliance of OPC Company will vary from INR 1500 to 2500 to be paid extra, if there will be any penalty, it will also be paid extra.
TERMS : Nil Compliance only includes MCA Compliance, ITR filing and Financial Preparation.
