Overview of Annual Compliances of One Person Company
A One-person Company is a company that is wholly managed and controlled by a single person and also the management of OPC comprises only one person which consists of 100% of shares in that company. Section 2(62) of Companies Act 2013, defines OPC as a company which has only one person as a member. In India, OPC can be registered only as a Private Limited Company that is why all the legal provisions which apply o Private Limited Company are also applicable to OPC. Certain provisions for Annual Compliance for OPC need to comply every year. Before going through Annual Compliances of One Person Company, let us know about what is OPC?
What is One Person Company?
A One-Person company is a company having one person as its member. A member of a company is a shareholder of the company. OPC Registration is done when there is only 1 member or promoter for the business. Initially, Businessman prefers OPC registration instead of sole proprietorship business because of the several advantages that OPCs offer.
Why it is Essential to Comply with Annual Compliance in OPC?
Running a One-Person Company is not that easy. Often, the persons thinking to start a company are 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.
What are the Benefits of One-Person Company Compliances?
There are various benefits of a One Person Company such as-
To enhance the confidence of the investor, the member of the OPC must comply with-
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 has been expanded now for OPC Companies. Below mentioned are the advantages of performing annual compliances of One Person Company.
Elucidate the Procedure for Annual Compliances of One-Person Company
The Annual Compliances for One Person Company are-
Conducting the Board Meeting
As per Section 173 of the Companies Act, 2013 at least 1 meeting of the Board of Directors shall be conducted every 6 months, and the gap between 2 meetings is not less than 90 days. Consequently, a One Person Company should conduct a minimum of 2 board meetings every year.
NOTE-Section 173 and 174 (Quorum of Meeting of Board of Directors) will not apply to an OPC in which there is only one director on its Board.
Penalty:Company shall be levied with a penalty of Rs 25,000/- and Officer in default shall be levied with a penalty of Rs 5,000/-
Appointment of Auditor
Under Section 139 of the Companies Act, Auditor Appointment is compulsory for One Person Company. It shall get its accounts audited by Chartered Accountant firm, where the Auditor shall verify books of account and issue an Audit report.
Note-Provision relating to rotation of auditor does not apply to OPC.
Filing the Annual Return
Every One Person Company must file the Annual Return within 180 days from the end of the Financial Year. The particulars of the Annual Return shall include the information about-
The Below-mentioned forms are required to be submitted while filing the Annual Return.
Form MGT-7 (Annual Return)- Every OPC shall file its Annual Return within 180 days from the end of the financial year.
The Company must also file the Financial Statements that relate to the finances of the company and includes-
Form AOC-4 (Financial Statements)-Everyone Person Company shall file its Balance Sheet together with a statement of Profit and Loss Account and Director Report within 180 days from the end of the financial year.
Disclosure of Interest in Other Entities
In every financial year, the directors of the OPC in its 1st meeting of the Board of directors need to disclose his interest in other entities in form MBP-1.
Penalty: The Director in default shall be punishable with imprisonment which may extend up to 1 year
KYC of Director of the company
Every individual who holds DIN as of 31st March of the financial year is required has to submit Form DIR-3-KYC for the respective financial year on or before 30th September of the immediate next financial year.
Filing the Form DPT-3
DPT-3 to be filed every year on or before 30 June in respect of return of Deposit and particulars not considered Deposits as on 31st March.
Preparing the Statutory register
As per Section 88 of the Companies Act, 2013, One Person Company shall also maintain the statutory registers.There are also certain Event-based compliances, that are required to be followed by OPC.
What Documents are required for the Annual Compliance of One Person Company?
The Below-mentioned documents are required for Annual Compliances of One Person Company-
How Corpbiz can assist clients in Annual Compliance process of the One-Person Company?
We at Corpbiz have trained experts to help you throughout the Annual Compliance process of the one-person company. Our Experts will guide and assist you in the compliance process and also ensures the timely and effective completion of your work. For any queries related to Annual Compliance and related services, feel free to contact our experienced and trained professionals at Corpbiz. Contact Corpbiz and our team of experienced professionals and provides timely updates about the process and get your job completed.Package Inclusion
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- Enhances the confidence of the Financial Sponsor.
- Provides active status.
- Enhances transparency and creditability.