{"id":54110,"date":"2023-03-28T15:24:56","date_gmt":"2023-03-28T09:54:56","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=54110"},"modified":"2023-03-28T15:26:11","modified_gmt":"2023-03-28T09:56:11","slug":"what-are-the-mandatory-annual-compliances-for-one-person-company","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/what-are-the-mandatory-annual-compliances-for-one-person-company\/","title":{"rendered":"What Are The Mandatory Annual Compliances For One Person Company?"},"content":{"rendered":"\n<p>According to the Income Tax Act and the Companies Act, One Person Companies (OPCs) are obligated to maintain compliance. Thus, filing an income tax return with the Income Tax Department and an annual return with the Ministry of Corporate Affairs are the major components of maintaining <strong><a href=\"https:\/\/corpbiz.io\/annual-compliances-of-one-person-company\">annual compliances for One Person Company<\/a><\/strong>.\u00a0 One-person businesses may additionally need to follow TDS laws, GST regulations, VAT\/CST regulations, service tax regulations, and others in addition to the fundamental compliance requirements. The regulatory requirements for a one-person business would vary depending on the sector, the state of incorporation, the number of staff members, and the volume of sales. Scroll down to check mandatory annual compliances for One Person Company.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-mandatory-annual-compliances-for-one-person-company\/#OPC_Characteristics_in_India\" >OPC Characteristics\nin India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-mandatory-annual-compliances-for-one-person-company\/#Why_Is_Requirements_For_Annual_Compliances_For_One_Person_Company_Important\" >Why Is\nRequirements For Annual Compliances For One Person Company Important?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-mandatory-annual-compliances-for-one-person-company\/#What_Are_The_Advantages_Of_Annual_Compliances_For_One_Person_Company\" >What Are The Advantages\nOf Annual Compliances For One Person Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-mandatory-annual-compliances-for-one-person-company\/#Annual_Compliances_for_One_Person_Company\" >Annual\nCompliances for One Person Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-mandatory-annual-compliances-for-one-person-company\/#What_Paperwork_Is_Needed_For_A_One-Person_Company_To_Comply_Annually\" >What Paperwork\nIs Needed For A One-Person Company To Comply Annually?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-mandatory-annual-compliances-for-one-person-company\/#How_Can_I_Online_File_the_Forms_and_Statements\" >How Can I\nOnline File the Forms and Statements?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-mandatory-annual-compliances-for-one-person-company\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"OPC_Characteristics_in_India\"><\/span>OPC Characteristics\nin India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following are some crucial characteristics of an OPC firm in India:<\/p>\n\n\n\n<p><strong>It&#8217;s A Privately Held Business<\/strong><\/p>\n\n\n\n<p>The Companies Act&#8217;s Section 3(1)(c) makes it clear that in all legal\nproceedings and disputes, an OPC shall be treated as a Private Limited\nCorporation. An OPC will be subject to all current laws and regulations that\napply to private companies.<\/p>\n\n\n\n<p><strong>Nominee<\/strong><\/p>\n\n\n\n<p>The OPC&#8217;s lone shareholder must designate a nominee at the time of the One Person Company Registration. The nominee is the person who will take over as the OPC&#8217;s\nIndian shareholder in the case of the owner&#8217;s death or incapacity.<\/p>\n\n\n\n<p><strong>Continuous Succession<\/strong><\/p>\n\n\n\n<p>When an OPC&#8217;s only member passes away, the nominee has the option of\nbeing rejected or choosing to take their place as the OPC&#8217;s lone member. A Solo\nProprietorship is not eligible for this choice.<\/p>\n\n\n\n<p><strong>No Required Minimum Paid-Up Capital<\/strong><\/p>\n\n\n\n<p>The minimum paid-up capital for a one-person company is not specifically\nspecified under the Companies Act.<\/p>\n\n\n\n<p><strong>Number of Directors<\/strong><\/p>\n\n\n\n<p>A minimum of one director and a maximum of 15 directors may be appointed\nto an OPC. To add more directors, OPC&#8217;s have to submit a resolution.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_Is_Requirements_For_Annual_Compliances_For_One_Person_Company_Important\"><\/span>Why Is\nRequirements For Annual Compliances For One Person Company Important?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The management of a one-person business is not simple. Those who are\nconsidering starting a business frequently are not aware of the crucial\ncompliances that must be fulfilled legally; failure to do so might result in\nthe business paying substantial fines. The corporation and its directors may\npotentially be subject to undertakings and additional investigations in\naddition to fines. It is important to note that a One-Person Corporation is qualified to\nundertake yearly compliances as soon as it is incorporated.<\/p>\n\n\n\n<p>Penalties and fines associated with non-compliances cause a variety of\ndifficulties for the business. It is crucial to be aware of and adhere to the\nrelevant compliances in order to avoid such scenarios. It is necessary for a\none-person business to disclose to shareholders and investors its precise\nfinancial situation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Are_The_Advantages_Of_Annual_Compliances_For_One_Person_Company\"><\/span>What Are The Advantages\nOf Annual Compliances For One Person Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A one-person business can profit from a number of things, including:<\/p>\n\n\n\n<ul><li>Minimal protection against responsibility.<\/li><li>Improve your chances of receiving funding from financial sponsors.<\/li><li>Permanent state.<\/li><\/ul>\n\n\n\n<p><strong><em>The OPC member must adhere to the following requirements in order to\nincrease investor confidence:<\/em><\/strong><strong><em><\/em><\/strong><\/p>\n\n\n\n<ul><li>Corporate Law.<\/li><li>GST and income taxes.<\/li><\/ul>\n\n\n\n<p>The requirements for annual compliances for One Person Company has now\nbeen raised as of the year 2018. Regardless of ROC compliances, companies must\nfile annual filing forms by September 30 each year. The standard essential has\nbeen enhanced for OPC Corporations as of the year 2018. The benefits of doing annual\ncompliances for One Person Company are listed below.<\/p>\n\n\n\n<p><strong>Easy To Gain Support from a Financial Speculator<\/strong><\/p>\n\n\n\n<p>A company&#8217;s proper yearly compliances, including those with the OPC,\nincrease the confidence of financial speculators and make it simple to gain\ntheir support.<\/p>\n\n\n\n<p><strong>Active Status Is Provided<\/strong><\/p>\n\n\n\n<p>Timely and accurate compliances are important for keeping the\norganisation operational.<\/p>\n\n\n\n<p><strong>Makes Sure the Information Gathered Is Correct<\/strong><\/p>\n\n\n\n<p>Annual Compliances by the One-Person Business make sure the information\ngathered is truthful and accurate.<\/p>\n\n\n\n<p><strong>Avoids Harsh Penalties\u00a0<\/strong><\/p>\n\n\n\n<p>Violations of the law frequently carry harsh fines and punishments. The\nsevere fines can be avoided with proper yearly compliances.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Annual_Compliances_for_One_Person_Company\"><\/span>Annual\nCompliances for One Person Company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following\nare the annual compliances for One Person Company:<\/p>\n\n\n\n<p><strong>Holding the Board Meeting\u00a0<\/strong><\/p>\n\n\n\n<p>According to Section 173 of the Companies Act of 2013, the Board of\nDirectors must hold at least one meeting every six months, with a minimum of 90\ndays passing between meetings. As a result, a One Person Business should hold\nno less than two board meetings annually.<\/p>\n\n\n\n<p><strong>NOTE:<\/strong> If there is just one director on the board of an OPC, Sections 173 and 174 (Quorum of Meeting of Board of Directors) do not apply.<\/p>\n\n\n\n<p>Penalty: The company will be assessed a fine of Rs. 25,000, and the\nofficer will be assessed a fine of Rs. 5,000.<\/p>\n\n\n\n<p><strong>Election of an Auditor<\/strong><\/p>\n\n\n\n<p>The appointment of an auditor is required for One Person Companies under\nSection 139 of the Companies Act. It must have a Chartered Accountant company\nexamine its financial records. The auditor will check the books of accounts and\nprovide an audit report.<\/p>\n\n\n\n<p><strong>Note: <\/strong>OPC is not covered by the provision regarding the rotation of auditors.<\/p>\n\n\n\n<p><strong>Annual Return Filing<\/strong><\/p>\n\n\n\n<p>Every One Person Business is required to submit their annual return\nwithin 180 days of the fiscal year&#8217;s end. The specifics of the annual return\nmust contain the following details:<\/p>\n\n\n\n<ul><li>The shareholder\/member of the business.<\/li><li>Directors.<\/li><\/ul>\n\n\n\n<p>While submitting the annual return, the forms listed below must be\nincluded.<\/p>\n\n\n\n<p>Every OPC must submit its Annual Return on Form MGT-7 within 180 days at\nthe conclusion of the fiscal year.<\/p>\n\n\n\n<p><strong>Financial Report<\/strong><\/p>\n\n\n\n<p>The Business must also submit the Financial Statements, which cover the\nCompany&#8217;s finances and comprise the following:<\/p>\n\n\n\n<ul><li>Financial statement.<\/li><li>Profit and Loss Account Statement.<\/li><li>Director&#8217;s report.<\/li><\/ul>\n\n\n\n<p><strong>Financial Statements Form AOC-4<\/strong><\/p>\n\n\n\n<p>Within 180 days at the end of the fiscal year, Every Person Business\nmust file its balance sheet, together with a statement of profit and loss and\ndirector report.<\/p>\n\n\n\n<p><strong>Identification of Interest in Other Organisations<\/strong><\/p>\n\n\n\n<p>The OPC directors are required to report their ownership interests in\nother businesses on form MBP-1 at the first board meeting of each fiscal year. Infractions by the Director will result\nin a maximum one-year sentence of jail.<\/p>\n\n\n\n<p><strong>KYC of the Company&#8217;s Director<\/strong><\/p>\n\n\n\n<p>Every person who had a DIN as of the financial year&#8217;s 31st March was\nobliged to complete Form DIR-3-KYC for that financial year by the deadline of\n30 September of the next fiscal year.<\/p>\n\n\n\n<p>Filing of Form DPT-3 the Form DPT-3 must be filed annually on or before\nJune 30 in order to report deposits and information that was not a deposit as\nof March 31.<\/p>\n\n\n\n<p><strong>Statutory Register Being Prepared<\/strong><\/p>\n\n\n\n<p>The statutory registers must be kept up to date by a One Person\nCorporation, in accordance with Section 88 of the Companies Act of 2013.<\/p>\n\n\n\n<p>OPC is expected to adhere to a number of Event-based compliances as\nwell.<\/p>\n\n\n\n<ul><li>Share transfer.<\/li><li>Director appointment or resignation.<\/li><li>Nominees of bank signatories have changed.<\/li><li>Auditor changes.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Paperwork_Is_Needed_For_A_One-Person_Company_To_Comply_Annually\"><\/span>What Paperwork\nIs Needed For A One-Person Company To Comply Annually?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following papers are necessary for Annual Compliances for One Person\nCompany:<\/p>\n\n\n\n<ul><li>Receipts for sales and purchases made during the year, as well as\n     invoices for costs spent.<\/li><li>Details of bank statements for all accounts held in the company&#8217;s\n     name from 1 April to 31 March.<\/li><li>Specifics of the submitted GST returns (If Any).<\/li><li>Information about deposited TDS challans and submitted TDS returns\n     (If any).<\/li><li>P&amp;L account and balance sheet.<\/li><li>Financial records.<\/li><li>Director reports.<\/li><li>Specifics about the Member.<\/li><li>Directors&#8217; information.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Can_I_Online_File_the_Forms_and_Statements\"><\/span>How Can I\nOnline File the Forms and Statements?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>You may easily file all of the AOC4, MGT7, and ADT-1 forms online. Here are a few easy steps to help you get started.<\/p>\n\n\n\n<ul><li>Visit the <strong>MCA<\/strong><sup><a class=\"text-primary\" href=\"https:\/\/www.mca.gov.in\/\"><strong>[1]<\/strong><\/a><\/sup> website.<\/li><li>Download the electronic form you want to submit.<\/li><li>Complete the form in its entirety.<\/li><li>Hit the &#8220;upload e-form&#8221; button.<\/li><li>Upload the completed electronic form.<\/li><li>You will be required to make a payment after uploading.<\/li><li>Online fee payment.<\/li><\/ul>\n\n\n\n<p>In addition to the aforementioned compliances, an OPC, like any other\nbusiness, is obliged by the Act to keep all necessary statutory compliances,\nsuch as the statutory registers, minutes book, and other secretarial documents.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Every OPC is required to abide by all conditions and guidelines established by the Companies Act of 2013. The Act&#8217;s regulations carry severe penalties and fines for violations. Thus, it is imperative that you are aware of the prerequisite compliances, as indicated above, to prevent your OPC from suffering such severe losses. To better grasp the compliances and submit them without fuss, get in touch with the experts at Corpbiz.<\/p>\n\n\n\n<p><strong>Also Read<\/strong>:<br><a href=\"https:\/\/corpbiz.io\/learning\/compliance-and-annual-filing-requirements-of-opc\/\">What Are The Compliance And Annual Filing Requirements Of One Person Company?<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to the Income Tax Act and the Companies Act, One Person Companies (OPCs) are obligated to maintain compliance. Thus, filing an income tax return with the Income Tax Department and an annual return with the Ministry of Corporate Affairs are the major components of maintaining annual compliances for One Person Company.\u00a0 One-person businesses may [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":54111,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[415],"tags":[3335],"acf":{"service_id":"421"},"authorName":"Sakshi Srivastava","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/IMG-20180130-WA0007.jpg","authorDescription":"Sakshi has pursued B.B.A.LL.B.(IPR Hons.). She is an avid reader and is keen to gather and share her knowledge on the subjects relating to IPR, Company Law and GST. Priorly she has worked as a legal researcher and vide her articles she aims at improving the core knowledge of the subjects to the masses.","postViews":2179,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/54110"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=54110"}],"version-history":[{"count":3,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/54110\/revisions"}],"predecessor-version":[{"id":54115,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/54110\/revisions\/54115"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/54111"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=54110"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=54110"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=54110"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}