OPC Compliance

A One Person Company (OPC) is a unique form of business entity owned and managed by a single individual.

Under Section 2(62) of the Companies Act, 2013, an OPC is defined as a company with only one member.

The entire management and ownership of the company are held by this individual, who owns 100% of the shares.

In India, OPCs can only be registered as Private Limited Companies, which means they must comply with all legal provisions applicable to private companies, including annual compliance requirements.

As an OPC owner, it is crucial to adhere to the government-mandated annual compliance regulations to ensure your business remains legally compliant.

At DC Management System, we specialize in guiding OPCs through their compliance obligations. Our team is dedicated to providing expert assistance and timely advice to meet these requirements.

Contact us today to explore how we can support your annual compliance needs.

One Person Company

A One Person Company (OPC) is an entity with a single individual as its sole member or shareholder. Entrepreneurs often prefer OPCs over sole proprietorships due to the various advantages they offer, including limited liability and better access to funding opportunities.

OPC Compliance Requirements

OPC compliance refers to the set of legal obligations that an OPC must fulfill to maintain its active status as a distinct legal entity. Each year, OPCs are required to file annual returns and audited financial statements with the Ministry of Corporate Affairs (MCA), irrespective of their turnover. These filings disclose the company’s financial and operational activities for the previous financial year.

Failure to meet these compliance requirements can lead to severe consequences, such as penalties, fines, and even the removal of the company’s name from the Registrar of Companies (RoC). Directors may also face disqualification. Thus, adhering to compliance regulations is critical for the smooth functioning of an OPC.

Key Benefits of OPC Compliance

Maintaining annual compliance provides several benefits, including:

1. Limited Liability Protection: Compliance ensures the business owner’s personal assets are safeguarded.
2. Ease in Raising Funds: Proper compliance builds investor confidence, making it easier to secure funding.
3. Active Legal Status: Adhering to regulations ensures the company remains legally active.
4. Avoidance of Penalties: Timely compliance helps avoid hefty fines and penalties.

Mandatory Compliance Requirements for OPC

1. Annual General Meeting (AGM)

OPCs must conduct an AGM within six months of the financial year’s end, even if there is only one director.

2. Filing Financial Statements

Financial documents such as the balance sheet, profit and loss statement, and cash flow statement must be submitted to the RoC within 30 days of the AGM.

3. Income Tax Returns (ITR)

ITRs must be filed by July 31st each year.

4. Annual Return Filing

An annual return must be submitted to the MCA within 60 days of the AGM.

5. Statutory Audit

A qualified Chartered Accountant must conduct a statutory audit of the company’s financial statements.

6. Maintenance of Statutory Records

Statutory registers, including the register of members, directors, and meeting minutes, must be maintained.

Other Compliance Requirements

• Appointment of Auditor: An Auditor must be appointed as per Section 139 of the Companies Act.
• Board Meetings: A minimum of one board meeting must be conducted annually.
• Disclosure of Interests: Directors must disclose their interests in other entities using Form MBP-1.
• Filing Form DIR-3 KYC: Directors must file their KYC details annually by September 30th.
• Form DPT-3: This form must be filed by June 30th to report deposits and non-deposit particulars.

Penalties for Non-Compliance

Failing to comply with annual OPC requirements can attract the following penalties:

• Late filing fees of INR 200 per day for annual returns.
• Penalties up to INR 10,000 or more for delayed financial statement submissions.

GST Compliance for OPC

OPCs registered under GST must file regular GST returns based on their turnover.

For companies with an annual turnover below ₹5 crores, quarterly returns are mandatory.

Those exceeding ₹5 crores must file monthly returns. Annual returns and audits are required for turnovers above ₹2 crores.

Documents Required for OPC Compliance

To meet annual compliance requirements, the following documents are typically needed:

1. Audited financial statements.
2. Copies of board resolutions.
3. Details of the director’s KYC.
4. GST returns, if applicable.
5. Statutory registers and records.

At DC Management System, we simplify OPC compliance for business owners, ensuring timely and accurate filings.

Reach out to us to safeguard your company’s legal status and avoid penalties.