Annual Compliances of One Person Company (OPC)

The Companies Act, 2013 has revolutionized the rules of business in our country by introducing several new concepts that were previously unavailable. One such change was the introduction of the One-Person Company concept. This has led to the recognition of a completely new way of starting businesses that allows for flexibility while providing limited liability protection that partnership or sole proprietorship. This article discusses the concept of annual compliances of a one-person company.

Table of Contents-

What is a One-person Company?

Section 2 (62) of the Companies Act, 2013 defines a one-person company as a sole person in its membership. In addition, members of a company have nothing to do but register their memorandum of organization, or its shareholders. It has only one member. Such companies are usually built where there is only one business founder/promoter. Entrepreneurs whose businesses are at initial stages choose in preference to creating OPCs because of the few benefits offered by OPC instead of sole proprietary businesses.

Annual Compliances of One person Company 

One Person Company is a component that receives a fee from a different person who needs to maintain its flexibility through a standard recording by MCA. For each organization, it is mandatory to compile annual returns and budget summaries audited by the MCA for each financial year. The ROC recording is obligatory regardless of turnover.If a certain transaction is performed or not, OPC’s annual compliance is compulsory for every registered company. The deadline for the Company’s annual filing of the year depends on the date of the Annual General Meeting.

Continued failure could lead to the removal of a company name from the RoC register, which includes the removal of directors. Also, it was noted that the MCA has taken strong action to address any such failures.

Advantages of Annual Compliances

There are many advantages to the OPC Company such as limited liability protection, it is easy to raise capital and constant existence while public confidence comes at an increasing cost of compliance with annual compliances. It is the responsibility of business owners to comply with corporate law, income tax, GST, and state laws.

Annual Compliances of One Person Company

S.No.  Title Sections/Rules Forms Detailing Compliance Details
Disclosures by the Director of His Interests Section 184 (1) and Rule 9 (1) of Companies (Board Meetings and its Powers) Rules, 2014 Form MBP-1 Every director must meet at the first meeting of the Board where he participates as a director and thereafter after the first general meeting, in every financial year or whenever any change in disclosure has been made, and then at the first meeting of the Board held after that change, disclose his or her concerns or interests to other entities that will include ownership of the shares.
Disqualifications of Directors Section 164 (2) & 143 (3) (g) & Rule 14 (1) of Companies (Appointment of Directors) Rules, 2014 Form DIR-8 Every director shall notify the company concerned of his or her dismissal under section 164(2), if any, before being appointed or re-appointed.
Annual return Section 92 (4) & (1) & Rule 11 (1) of the Companies (Management and Administration) Rule, 2014 e-form MGT-7A OPC will submit its Annual Remuneration within 60 days of the resolution in Minute Book.
Financial Statement Section 137 & Rule 12(1) of the Companies (Accounts) Act, 2014     – One Person Company will file a copy of the financial statements duly received by its member, together with all documents required to be attached to those statements, within 180 days from the close of the financial year.
Period for notice Rule 12A DIR-3 All company directors will submit DIR-3 on or before 30 September each year.
Furnish information or statistics Section 405 MSME 1 Company to submit MSME-1, part of the year (half-yearly) in respect of pending payments to MSME vendors as at the end of the half-year.
Acceptance of deposit Section 73, Rule 16 DPT-3 DPT-3 will be filed annually on or before 30 June in respect of a Deposit Refund and details that may be considered a Deposit from 31 March.
Appointment of Auditors Section 139  ADT-1 The Auditor will be appointed for 5 years on the ADT-1 form within 15 days of the Annual General Meeting.
Annual return Section 92  MGT-7 OPC completes its annual return within 180 days from the end of the financial year.

Final words

Consolidating an OPC is a very simple process and takes many smaller requirements than any other business method. OPC registration is simple and cost-effective in terms of favored compliance. One-Company Company AGM may be approved by entering the details in the Minutes’ Book. In such a company, there is no need to hold a physical AGM, as there is only one Member in its membership. The OPC must comply with the provisions of the Companies Act, 2013 and other applicable laws and if in doubt seek professional help.

CategoryCompliance

CS Madhavi Singh Rajawat is a commerce graduate from IIS University, Jaipur and an associate member of Institute of Company Secretaries of India. She is also an LLB aspirant. Her interest lies in the field of corporate and securities laws, general corporate advisory matters and FEMA matters and compliances, litigation services, and also in NCLT related services. She has proficiency in the drafting of documents

Copyright © 2022 Goyal Mangal & Company.