One Person Company (OPC) Compliance
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OPC Compliance
OPC (One Person Company) Compliance in India involves adhering to various regulatory and legal requirements under the Companies Act, 2013. An OPC is a type of company that can be started by a single person, offering the benefits of limited liability and a separate legal entity.
- Incorporation and Registration:
- OPC Registration must be registered with the Registrar of Companies (ROC), and obtain a Certificate of Incorporation.
- Director Identification Number (DIN): The sole director of the OPC must have a valid DIN, which is usually obtained during the incorporation process.
- Annual Compliances
- Annual General Meeting (AGM): OPCs are exempt from holding AGMs. Instead, the sole member can pass resolutions by written means.
- Filing of Financial Statements (Form AOC-4): OPCs must file their financial statements with the ROC within 30 days from the end of the financial year, including balance sheets and profit & loss accounts.
- Annual Return (Form MGT-7): OPCs must file an annual return with the ROC within 60 days of the end of the financial year.
- Board Meetings and Resolutions
- Board Meetings: OPCs do not have the same board meeting requirements as other companies. The sole director can make decisions without holding formal board meetings.
- Resolutions: Resolutions are passed by the sole member in writing and recorded in the minutes of meetings or resolutions.
- Director’s Compliance
- Director Identification Number (DIN): The sole director must have a valid DIN and ensure its renewal if required.
- Annual KYC for Directors: The director must file DIR-3 KYC annually to update their details.
- Statutory Audits
- Audit of Financial Statements: OPCs must have their financial statements audited annually by a qualified Chartered Accountant.
- Tax Compliance
- Income Tax Filing: OPCs must file their income tax returns annually by September 30 of the assessment year.
- Goods and Services Tax (GST): If the OPC’s turnover exceeds the threshold limit, it must register for GST, file GST returns (GSTR-1, GSTR-3B), and pay GST dues.
- TDS (Tax Deducted at Source): OPCs must deduct TDS on applicable payments and file TDS returns quarterly.
- Other Compliance Requirements
- Change in Registered Office: Any change in the registered office must be notified to the ROC using Form INC-22.
- Change in Director: Any changes in the sole director must be filed with the ROC using Form DIR-12.
- Filing for Conversion
- Conversion of OPC: OPCs can be converted into a private limited company or other types of companies by filing the necessary forms with the ROC, if certain conditions are met.
- Fines and Penalties: Failure to comply with the regulatory requirements can lead to fines, penalties, and interest on late filings.
- Disqualification: Continued non-compliance can result in disqualification of the director.
- Striking Off: Persistent non-compliance can lead to the company’s name being struck off the register by the ROC.
- Legal Standing: Ensures the OPC operates within the legal framework, avoiding disputes and penalties.
- Transparency: Promotes transparency and accountability in financial and operational activities.
- Avoiding Penalties: Helps avoid fines and legal issues by adhering to regulatory requirements.
- Business Operations: Ensures smooth business operations and continuity.
- Incorporation Documents: Certificate of Incorporation, MOA, AOA, PAN Card, Proof of Registered Office Address.
- Compliance Filings: Annual Financial Statements (Form AOC-4), Annual Return (Form MGT-7), Director KYC Forms (DIR-3 KYC).
- Financial Documents: Financial Statements, Audit Reports, Bank Statements.
- Tax & TDS Documents: Income Tax Returns, GST Returns (if applicable), TDS Returns and Certificates.
- Corporate Records: Resolutions, Minutes of Resolutions, Register of Directors.
1. What is an OPC?
An OPC (One Person Company) is a type of company with a single shareholder, offering limited liability and a separate legal entity status while allowing the flexibility of a sole proprietorship.
2. What are the key compliance requirements for an OPC?
Key compliance requirements include:
- Filing Annual Financial Statements (Form AOC-4)
- Filing Annual Return (Form MGT-7)
- Director KYC Forms (DIR-3 KYC)
- Maintaining proper records and minutes
3. When should an OPC file its Annual Financial Statements?
Annual Financial Statements (Form AOC-4) must be filed within 30 days from the end of the financial year.
4. What is the deadline for filing the Annual Return?
The Annual Return (Form MGT-7) must be filed within 60 days from the end of the financial year.
5. Are OPCs required to hold annual general meetings (AGMs)?
OPCs are exempt from holding AGMs. Instead, the sole member can pass resolutions by written means.
6. What is the role of the sole director in an OPC?
The sole director manages the OPC and makes decisions, with no need for formal board meetings. Resolutions can be passed in writing.
7. What is the Director Identification Number (DIN), and is it required for OPCs?
DIN is a unique identification number for directors. The sole director of an OPC must have a valid DIN.
8. Are OPCs required to have their financial statements audited?
Yes, OPCs must have their financial statements audited annually by a qualified Chartered Accountant.
9. What are the tax compliance requirements for an OPC?
OPCs must file annual income tax returns by September 30 of the assessment year and comply with GST regulations if turnover exceeds the threshold limit.
10. How should changes in the OPC’s registered office be reported?
Any change in the registered office must be notified to the ROC using Form INC-22.
11. What documents are required for Director KYC?
Directors need to file DIR-3 KYC annually, updating their details with the ROC.
12. Can an OPC be converted into a Private Limited Company?
Yes, an OPC can be converted into a Private Limited Company or another type of company by filing the necessary forms with the ROC.
13. What are the consequences of non-compliance for an OPC?
Non-compliance can lead to penalties, fines, and interest on late filings. Continued non-compliance may result in the OPC being struck off the register.
14. How can an OPC ensure timely compliance?
An OPC can ensure timely compliance by maintaining an organized schedule for due dates, using compliance management tools, and consulting with professionals.
15. What records should be maintained by an OPC?
OPCs should maintain records of financial transactions, resolutions, minutes, and any communications with regulatory authorities.
16. What should be done if the OPC fails to meet compliance obligations?
Address non-compliance issues promptly by filing overdue returns, paying penalties, and rectifying discrepancies to avoid further legal action.