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One Person Company Compliance: Avoid Costly Penalties

According to Section 2 (62) of the Companies Act, 2013, a company with only one person as its member falls into the category of One Person Company. An OPC compliance requirement is similar to that of a private limited company. As we all know, a one-person company enjoys the status of a separate legal entity. Thus, the extent of the liability of the directors is limited to the extent of the amount invested by them.

It must be noted that one person company can only be incorporated as a private limited company. Thus, all the provisions applicable to private companies are applicable to one person company compliance too.

In this article, you will learn about one person company compliance and the annual returns to be filed after the incorporation of an OPC.

Annual Filings for One Person Company Compliance:

  1. MBP 1:
    Form MBP-1 is to be filed by the directors in one person company compliance to disclose their interest in other companies yearly on the first Board Meeting of every year or the instance of change in the Director of the OPC.

  2. DIR-8:
    Form DIR-8 is required to be filed by every director in one person company compliance at the time of his/her appointment ascertaining that he/she is not disqualified/debarred from functioning as a director of a company.

  3. DIR-3 KYC:
    In one person company compliance, directors owning DIN (Director Identification Number) with active status are required to file DIR-3 KYC annually as per the Companies Rules, 2014. Failure to file DIR-3 KYC will lead to inactive DIN status on the MCA portal. Please note that no Form of annual compliances for one-person companies can be filed if DIR-3 stands deactivated.

  4. ADT-1:
    In one person company compliance, an auditor shall be appointed within fifteen days of holding an Annual General Meeting for a period of five years.

  5. MGT-7:
    All one-person companies are required to file their annual returns within a time span of sixty days of holding the Annual General Meeting. This can be done by filing MCA Form MGT-7. Failure to file annual returns levy a penalty of Rs 100 per day from the due date of non-filing.

  6. AOC-4:
    In one person company compliance, an OPC is required to file its financial statements, i.e., Profit and Loss Account and Balance Sheet along with Director Report by filing Form AOC-4 within sixty days of holding the Annual General Meeting. Failure to file Form AOC-4 levies a penalty of Rs 100 per day.

  7. Appointment of Auditor:
    In OPC compliance, the director is required to appoint an auditor within thirty days of incorporation of the company. One person company that fails to appoint an auditor is liable to pay a penalty of Rs 300 per month. In addition, the company will not be allowed to commence business. He/She is required to stay in the office till the completion of 1st AGM. There is no need to file Form ADT-1 for the appointment of the first auditor.

Other Annual Compliance for One Person Company

  1. Directors' Report:
    A Director's Report is a financial document mandated by the Companies Act, 2013 which is intended to explain to the shareholders, the affairs of the company, the nature of the business and its scope of one person company compliance.

  2. Circulation of Financial Statements and other relevant documents:
    In one person company compliance, the business must send to its members all financial records- including the Financial Statement, Directors' Report and Auditors' Report at least 21 days prior to the holding of the AGM.

  3. Statutory Register:
    In OPC compliance, the company shall maintain mandatory registers such as the Director's register, Director's shareholding register and Transaction register.

  4. Section 173(5) of the Companies Act, 2013:
    According to this Act, in one person company compliance, a company is required to conduct at least one board meeting in each half of the calendar year. In addition to this, the time gap between two board meetings must not be less than a period of ninety days.

    Note: If there is only one director in an OPC, this requirement shall not be met.

  5. Statutory Audit:
    As per Section 139 (1) of the Companies Act, 2013, an OPC is mandated to hold its first AGM within fifteen days of the incorporation of the OPC. A subsequent auditor is appointed to monitor the fair dealings of a company in terms of its financial position. He/She is appointed in the first AGM and continues to stay in the same position till the sixth AGM. As per the Companies Act, 2013, a subsequent auditor is appointed by the filing Form ADT-1.

  6. Annual filings to the Registrar of Companies:
    MGT-7 and AOC-4 are the most important forms under one person company compliance that are to be filed with the Registrar of Companies (RoC).

  7. Filing of Income Tax Return (ITR):
    In one person company compliance, ITR filing is required to be done on or before 30th September of the current financial year. In case the annual turnover of an OPC is more than Rs 1 crore, a tax audit will be statutory. The ITR in such a situation will be filed in Form VI.

  8. Appointment of Director:
    In one person company compliance, every person to be appointed as a Director shall provide his/her consent in the Form DIR‐2 and such consent shall be filed by the Company with the Registrar of Companies (ROC) in Form DIR‐12, within thirty days of appointment.

Event-based One Person Company Compliance

The event-based OPC compliance includes all compliances that are liable to be followed on the occasion of an occurrence of the concerned event. Event-based hassle-free compliances are aforementioned to maintain legal comprehensiveness and avoid disputes in the course of the business. They are:
  • Appointment or Resignation of a Director;
  • Appointment of Managing a director.
  • Change in the statutory auditors;
  • Transfer of Shares
  • Increase of Authorized Capital;
  • Change of Name of Company;
  • Change in Registered Office Address (Through Form INC-22)
  • Registration/Modification of Charge
  • Appointment of Auditor
  • Statutory Audit of Accounts
  • Filing of Annual Return (Form MGT-7)
  • Filing of Financial Statements (Form AOC-4) Board Meetings
  • Annual General Meeting
  • Preparation of Directors' Report
  • ITR and Audit requirement

At Taxzona, we provide you with comprehensive, hassle-free One Person Company compliance which would be dealt with by our professionals within a short time frame. Our team takes care of the documentation and aids in providing you with the realistic estimation of One person company compliance costs. With a team of highly qualified professionals at your service, there is no way your one-person company compliance can go wrong.

We will stand by you and help you grow and manage your business while we take care of your tax compliances. You can always get in touch with our certified professionals at any point in time for deliberation and assistance concerning compliances throughout your journey with Taxzona. For more questions and queries, feel free to contact us:

Written By: Shahnawaz Shaikh
Email us at [email protected], Ph No: +919820444477

Also Read:

  1. One Person Company
  2. One Person Company Concept
  3. Basic Concept Of The One Person Policy
  4. One Person Company Is A Hybrid Structure
  5. One Person Company under Companies Act 2013
  6. How to convert One Person Company to Private Limited Company
  7. Concept of One Person Company(OPC) under Companies Act, 2013

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