OPC Compliance in India
A One Person Company (OPC) is a type of business structure where the company is owned and managed by a single individual. As defined under Section 2(62) of the Companies Act, 2013, an OPC is a company with only one member, who holds 100% of the shares and controls the management of the business. In India, OPCs are required to be registered as Private Limited Companies, which means they must adhere to the same legal provisions applicable to private companies.
At FilingIn, we specialize in helping OPCs meet their annual compliance obligations, ensuring they stay in line with government regulations. Whether it’s filing annual returns, financial statements, or understanding other compliance requirements, our expert team is here to guide you every step of the way.
What is a One-Person Company (OPC)?
A One-Person Company (OPC) is a company structure that allows a single person to own and manage the entire business. Many entrepreneurs opt for OPC registration over a sole proprietorship due to the added benefits it provides, such as limited liability, easier fund-raising opportunities, and continuous existence.
OPC Compliances:
Every One-Person Company is required to fulfill specific legal requirements to maintain its active status. These annual filings are essential for reporting the company’s activities and financial performance to the Ministry of Corporate Affairs (MCA). Non-compliance can result in serious consequences such as deregistration of the company and disqualification of its director.
Here’s an overview of the mandatory OPC annual compliance:
- Filing Financial Statements: Prepare and file balance sheets, profit & loss statements, and cash flow statements within 30 days of the Annual General Meeting (AGM).
- Income Tax Returns: OPCs must file their tax returns by July 31st of each year.
- Annual Return Filing: The Annual Return must be filed with the MCA within 60 days of the AGM.
- Statutory Audit: Conduct an annual audit of the financial statements by a Chartered Accountant.
- Board Meeting: Hold at least one Board meeting every year.
Failure to meet these requirements can result in penalties, fines, and legal actions.
Importance of OPC Compliance:
It is crucial for OPCs to stay compliant with annual regulations. FilingIn ensures that you avoid hefty penalties, maintain your company’s active status, and keep your data accurate. Proper compliance also helps to:
- Maintain Active Status: Regular filing ensures that your OPC remains registered and in good standing.
- Avoid Penalties: Non-compliance can result in fines or even company deregistration.
- Enhance Investor Confidence: Proper compliance makes it easier to raise funds from investors.
- Legal Standing
- Credibility
- Avoids Penalties
- Tax Benefits
- Limited Liability Protection
- Access to Funding
- Improved Operations
- Reputation
- Prevents Dissolution
- Simplified Compliance
To stay compliant, OPCs must maintain and submit the following documents:
- Financial Statements: Balance Sheet, Profit & Loss Account, etc.
- Bank Statements: For all company accounts.
- GST Returns (if applicable): If your OPC is registered under GST, file the necessary returns.
- TDS Returns: Include TDS challans and returns if applicable.
- Director’s Report: A report prepared by the directors, including all the necessary details of the company’s operations.
Non-compliance with OPC regulations can attract severe penalties, such as:
- Late Fee for Annual Return: A penalty of INR 200 per day is levied for delays.
- DIN KYC: Failing to file DIN KYC can attract a penalty of INR 5000.
Key OPC Annual Compliances:
- Conducting the AGM: OPCs must hold an Annual General Meeting (AGM) within six months of the financial year’s end. This is mandatory even if the company only has one director.
- Filing Financial Statements: OPCs need to prepare and file financial statements like Balance Sheet, Profit & Loss Account, and Cash Flow Statements with the Registrar of Companies (RoC).
- Income Tax Filing: Submit your annual income tax returns by the due date. Failure to file on time may result in penalties.
- Appointment of Auditor: OPCs must appoint a Chartered Accountant as an Auditor for conducting a statutory audit.
- Filing Annual Return: OPCs must file their annual return with the Ministry of Corporate Affairs (MCA).
Mandatory Filing Requirements for OPCS:
- Filing of Form MGT-7: This form is mandatory for filing the Annual Return.
- Filing of Form AOC-4: This is required to submit financial statements, including the balance sheet and profit & loss account.
- Income Tax Returns: OPCs must submit their Income Tax Returns on time, typically by July 31st each year.
- Director KYC (Form DIR-3 KYC): Directors must submit their KYC details by September 30th every year.
FilingIn’s Ledgers Platform for OPC:
FilingIn offers an online platform designed specifically for OPCs, allowing them to manage financial transactions, stay updated on compliance requirements, and maintain accurate records. With FilingIn Ledgers, you can access your data from anywhere, ensuring that you are always compliant with the latest regulations.
For further information or if you have any questions related to OPC compliance, feel free to contact FilingIn today. Our dedicated team of professionals is ready to assist you with all your OPC-related needs.
At FilingIn, we offer specialized services for OPCs to ensure that your annual compliance is completed on time and without hassle. Our expert team will assist you with every step of the filing process, including handling your Annual Return, Income Tax Filing, Financial Statements, and more.
Our platform also provides cloud-based accounting and bookkeeping services, making it easier for OPCs to manage their financial transactions and stay compliant with the law.
Frequently Asked Questions in India
What is an OPC (One Person Company)?
An OPC is a type of business structure where a single individual is both the owner and the manager of the company. It allows for limited liability protection and is a legal entity distinct from its owner. Under the Companies Act, 2013, OPCs are registered as Private Limited Companies in India.
What are the mandatory annual compliance requirements for OPCs?
OPCs are required to fulfill several annual compliance requirements, including:
- Filing of Annual Return (Form MGT-7)
- Filing of Financial Statements (Form AOC-4)
- Conducting an Annual General Meeting (AGM)
- Filing Income Tax Returns
- Conducting a Statutory Audit
- Updating KYC of Directors (Form DIR-3 KYC)
Do OPCs need to conduct an AGM?
Yes, even though OPCs have only one director, they are still required to conduct an Annual General Meeting (AGM) within six months from the end of the financial year.
When should the OPC file its financial statements?
OPCs must file their financial statements (Form AOC-4) with the Registrar of Companies (RoC) within 30 days of the AGM. The due date for submitting AOC-4 is generally 27th September every year.
What documents are required for OPC annual compliance?
The following documents are required for OPC compliance:
- Financial Statements: Balance Sheet, Profit & Loss Account, and Director’s Report
- Bank Statements: For all company accounts
- GST Returns: If applicable
- TDS Returns: If applicable
- Income Tax Returns (ITR): For filing taxes
What is the penalty for not complying with OPC filing requirements?
Failure to comply with OPC filing requirements can result in penalties:
- Late filing fee for Annual Return: INR 200 per day
- DIN KYC penalty: INR 5000 for non-submission of Director KYC
- Additional penalties can arise from late submissions or incorrect filings.
Do OPCs need to file Income Tax Returns (ITR)?
Yes, all OPCs must file their Income Tax Returns (ITR) by July 31st of each year, regardless of whether they have income or not. The returns must include details of the company’s income, expenses, and taxes paid.
Is there a requirement to maintain statutory registers for an OPC?
Yes, an OPC must maintain statutory registers such as:
- Register of Members
- Register of Directors
- Minutes of Board Meetings These records are crucial for OPC compliance under Section 88 of the Companies Act, 2013.
Do OPCs need to appoint an Auditor?
Yes, OPCs are required to appoint a Chartered Accountant to conduct a statutory audit of their financial records, even if the company has only one director.
What happens if an OPC fails to comply with annual filings?
Failure to comply with OPC compliance requirements can lead to serious consequences:
- Penalties and fines
- Deregistration of the company
- Disqualification of the director It is important to comply with the filing deadlines and statutory requirements to avoid these penalties.
