Starting a One Person Company (OPC) in India can be a great option for small businesses or solo entrepreneurs. However, ensuring proper OPC compliance is crucial to avoid legal issues and penalties. This guide will help you understand the necessary compliances for a One Person Company, in line with the . At Unilex Consultants, we specialize in helping you meet these regulatory requirements efficiently.
What is a One Person Company (OPC)?
A One Person Company is a type of private limited company in India, where only one individual acts as the sole shareholder and director. It offers the benefits of limited liability, just like other private limited companies, but with fewer compliance requirements.
Key OPC Compliance Requirements
Despite being simpler than other company structures, OPCs still have to adhere to certain legal compliances. Let's explore the primary One Person Company compliances every OPC must follow:
1. Annual Filing of Financial Statements and Annual Returns
An OPC must file its financial statements and annual returns with the Ministry of Corporate Affairs (MCA) every financial year.
- Financial Statements: The company must prepare its balance sheet, profit and loss account, and cash flow statement.
- Annual Return (MGT-7A): OPCs must file annual returns using Form MGT-7A, detailing the company's financial and operational performance.
Failure to submit these filings within the prescribed timeline can lead to penalties.
2. Appointment of Auditor
An OPC is required to appoint a statutory auditor within 30 days of incorporation. The auditor will review the financial statements and ensure they meet compliance standards. The appointment is done through Form ADT-1 and remains valid for five years unless revoked earlier.
3. Board Meetings and Annual General Meetings (AGMs)
Although a One Person Company can operate with a single director, it must still conduct at least one board meeting every six months. In contrast to other companies, an OPC is exempt from holding an Annual General Meeting (AGM).
4. Income Tax Compliance
Just like other companies, OPCs are required to file income tax returns annually. Depending on the turnover, OPCs are subject to tax rates applicable under Indian tax laws, and additional compliances like GST may apply if the business crosses specific thresholds.
- Tax Audits: If the OPC’s turnover exceeds , it must undergo a tax audit.
5. Other Event-Based Compliances
Several event-based compliances are also mandatory, depending on the company's activities:
- Change of Nominee: Any change in the nominee shareholder should be communicated to the ROC using Form INC-4.
- Change in Registered Office: If there is a change in the company's registered office, Form INC-22 must be filed with the MCA.
6. Director's Compliance
The director of the OPC must comply with filing Director’s Identification Number (DIN) KYC annually using DIR-3 KYC. Non-compliance may result in deactivation of the director's DIN.
Penalties for Non-Compliance
Non-compliance with these OPC guidelines can lead to penalties or legal consequences. The fines can range from or more, depending on the nature and extent of the violation.
Conclusion
Adhering to the required OPC compliance guidelines is essential for the smooth functioning and legal standing of your business. At Unilex Consultants, we provide end-to-end assistance in handling all your One Person Company compliances, ensuring you stay on the right side of the law. Our expert team will guide you through every step, from filing annual returns to handling event-based compliances, so you can focus on growing your business.
