In India, OPC can be registered and converted into a Private Limited Company, hence, all the legal provisions that are followed by the private limited company will be applicable to One Person company. Thus, in those provisions, OPC must comply under specific annual provisions for the Annual Compliance. Achieve full compliance of One Person Company effortlessly with expert guidance.
After registering OPC, it is essential to look after and comply with the government’s annual compliance requirements. The main objective of it is to ensure that One Person company remains compliant with all the laws and regulations which are applicable.
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What is compliance of one person company?
Basically, the compliance of one person company referred to as certain legal requirements must be fulfilled by OPC. An OPC with a single owner should fulfil compliances to maintain its active and updated status as a separate legal entity.
It is mandatory that every year, registered OPCs should file an annual return and well-audited financial statements of the business carried out in the Ministry of Corporate Affairs (MCA). The reason behind these filings is to know the status of the OPC and its financial data for the current and previous years.
What is the significance of compliances of one person company?
It is very clear that One Person company is run by a single owner and all the decisions are carried by a single owner. Many of the OPCs’ are not aware of the compliances which are to be fulfilled, so they are faced with serious consequences like penalties and fines.
This can be a big hindrance to the operation of the business of OPC. Therefore, it is mandatory to be aware and comply with all the applicable regulations to avoid any serious consequences.
What are the benefits in compliance of one person company?
Compliance of One Person Company has several benefits which include high opportunities to get funds from different financial sponsors, limited liability protection etc.
- Easy to raise funds from Investors
- When the OPC files its annual compliances every year at the proper time, it can easily get funds from various financial investors.
- Maintains Active Status
- When the OPC follows the rules and complies with the annual compliances at the right time, it will help it to be updated and maintain the active status of its company.
- Accurate data collection
- The Annual compliances of OPC make sure that the data collected for the purpose of compliance are true and accurate.
- Avoid hefty penalties
- Proper and right annual compliances don’t amount to any kind of fine or penalty. If the annual compliance is not made by the OPC, then it should have to pay fines and penalties.
What is the penalty for non compliance of one person company?
Proper compliance by the OPC will not attract fines and penalties.
In the case of non-compliance, the company must pay the penalty of INR 25,000. When the officer is at fault for the annual compliance, OPC will be charged with a penalty of INR 5,000.
What documents required for compliance of One Person Company?
Here are the documents that are required for the annual compliance of One Person Company in India;
- Receipts of the purchases and sales of things, and invoices of those receipts of that particular year
- Bank statements from April 1st to March 31st for all the bank accounts
- Information of GST returns filed (if applicable)
- Details of TDS challans that are deposited and TDS return filed only if it’s applicable
- Balance Sheet of OPC
- Profit & loss account of the OPC
- Financial statements
- Details of the Director’s report
- Details of the member or shareholder
- Details and information about the director of OPC
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In conclusion, maintaining annual compliance of one person company in India is crucial for its smooth operation and legal standing. Adhering to these compliances ensures accurate financial reporting, active company status, and the avoidance of penalties.
The process not only facilitates easy fund acquisition but also promotes transparency and accountability, safeguarding the OPC and its owner from potential legal repercussions.
FAQs
1. What are the annual compliance of One Person Company in India?
Annual compliance for One Person Company involves tasks such as appointing auditors, conducting statutory audits, filing annual ROC reports, completing DIN KYC for directors, and filing Income Tax. Additionally, OPC may have to fulfill TDS filing, GST filing, PF filing, etc., based on specific conditions.
2. Is an OPC required to hold an Annual General Meeting (AGM)?
No, OPCs are not required to conduct an AGM, which is normally required for other forms of corporations. Instead of holding a formal AGM, OPCs can submit their financial statements to the Registrar of Companies.
3. What are the timelines for filing annual returns and financial statements by an OPC?
OPCs are required to file their annual return (Form MGT-7) and financial statements (Form AOC-4) within 180 days of the fiscal year’s end. Because the fiscal year ends on March 31st, the deadline is September 30th.
4. Does an OPC need to maintain statutory registers and records?
Yes, OPCs must keep certain statutory registers, such as the Register of Members, the Register of Directors and Key Management Personnel, and the Register of Charges. These records should be retained at the company’s registered office.
5. Is it necessary for an OPC to keep statutory registers and records?
Yes, according to the Companies Act of 2013, an OPC is obligated to keep registers and records. This comprises member, director, and charge registries, as well as board meeting minutes.
6. Are there any sanctions for an OPC’s non-compliance?
Yes, fines can be imposed for failing to comply with yearly filing requirements and other statutory responsibilities. These punishments may differ based on the nature and severity of the violation.
7. Can an OPC have more than one director or shareholder?
No, OPC can have only one natural person as both the director and shareholder. There can be up to 15 directors in the case of a Private Limited Company.
