In the 33rd GST council meeting, the Union Finance Minister, Arun Jaitley said-"The GST rates on Under-Construction housing would be 5% without ITC. We have accepted this recommendation of the...
One Person Company, shortly known as OPC, is a kind of company established under the Companies Act, 2013 for the purpose of enabling a solo Entrepreneur to begin and manage the limited liability entity. The main purpose of the OPC establishment is to support lone individual Enterprises. Typically, OPCs have a low turnover when compared to private limited companies. As a result, the requirements of OPC compliance are lesser than those of private limited companies. Besides this, OPCs mandatorily need to follow up with every compliance.
This article discusses the annual filing of returns and several OPC compliance requirements and checklists.
What are the mandatory OPC Compliance Requirements?
Although the private company and OPC both are governed under the Companies Act, 2013, both OPC and a private company has major differences at several grounds. Furthermore, their compliance also differ to some extent. If you register your business as OPC (One Person Company), then you need to follow up with the following OPC compliance as enlisted below:
1. Stationary Compliance
Initially, you need to first obtain the essential stationeries for your company which is also a part of OPC compliance requirements. They are as follows:
Rubber Stamp for Company
You can try to prefer round shaped rubber stamp boasting of company name or straight rubber stamp equipped with company name with the designation of authorized signatory. The rubber stamps are essential for companies to execute several legal documents. It includes cheques, opening forms, bank account, board resolutions and much more.
Every company, be it OPC or any other, need to affix or paint the company name and its registered office address outside every place or office in which it successfully carries on the company’s operations.
You should mandatorily print both the name and address of the registered office of OPC on the invoices, notices, letterhead and all other official company documents.
2. Mandatory post OPC compliance requirements
In this section, we have mentioned a few mandatory OPC compliances that every OPC should mandatorily follow. Therefore, have a look below:
One Person Company PAN Application
Obtaining the OPC PAN card is an initial step for every business legal entity which completes the OPC incorporation. You need to apply for PAN after successful incorporation for receiving its allotment letter. After that, the director of OPC needs to sign it properly, seal it with the rubber stamp, and finally courier it to NSDL office. Ultimately, you will receive the PAN Card within 15 days after sending the hard copy of your PAN application.
Open the OPC Bank Account
Opening the bank account for your One Person Company is a simple task. There is no need for extra documents or tax registrations for opening the bank account for One Person Company. According to the KYC norms of Indian Reserve Bank, you need to submit the following documents to open your OPC account. It includes:
- Association Memorandum of OPC
- Self-attested copies of One Person Company Incorporation Certificate
- Articles of Association of OPC
- Copy of your PAN allotment letter
- Resolution for opening a bank account for Company
- Identity proof of Director
- Copy of your telephone bill
Besides, we strongly advise you to ensure that all the submitted documents are self-attested with the company seal. Thus, it is essential to acquire company letterhead and company seal after the incorporation process of One Person Company.
Appointment of legal auditor
Like other companies, OPC requires hiring the statutory auditor exactly within thirty days from the incorporation date of the company. Further, the company director also needs to appoint the auditor. He must be a practicing and effective chartered accountant and hence, should be capable of auditing all kinds of financial accounts related to the company.
Therefore, it is significant to know that the Form ADT-1 should be filed with MCA actually within 15 days from the appointment date of auditor for the consequent appointment of an auditor. There is no form mandatory to file for the initial auditor appointment.
After the incorporation of the company, the share certificates are needed to be successfully issued that have evidence of the company ownership. Moreover, each share certified needs to be signed exactly by the authorized person or director. Additionally, this should also consist of the impression of a common company seal.
After the company’s incorporation, you should conduct the first meeting within thirty days from the incorporation date. According to the provision of Companies Act, 2013, Section 172, the OPC needs to hold a minimum of 1 board meeting in every half of its calendar year. Further, the minimum time period between the two meetings should be ninety days. In any circumstance, if the company has only 1 director, there is no need for conducting the meeting. Instead, you can pass a suitable resolution and also enter in the minute’s book. They are sufficient for meeting the requirement.
Importance of filing the required financial statements
If you are an OPC, you should file the copy of various financial statements which are prescribed in the AOC-4 form. Moreover, the time period for filing the statements should be within 180 days from the end of the financial year. Here are the major financial statements required to be filed in AOC-4 form as follow:
- Loss & Profit Account
- The balance sheet at the completion of every financial year
- Statement of any changes in equity
- Explanatory note
However, OPC doesn’t need to prepare the cash flow statements mandatorily. It means that a list of financial statements covers only the above-mentioned statements to meet the OPC compliance.
File the Annual Return
Every One Person company shall prepare yearly return with particular details at the completion of the financial year. Besides, you also need to file it with the ROC (Registrar of Companies) in a prescribed form named MGT-7 before the 30th September each year. The yearly return is signed by the secretary of a company. In case, you do not have a company secretary, you can ensure that it is signed by your company director.
|Type of form||Due dates||Mandatory attachment|
|MGT – 7||29th September of every financial year. For example, for the financial year 2018 – 2019 the last date for filing is 29th September 2019||Signed and scanned copy of your annual return|
|AOC – 4||29th September of every financial year. For example, for the financial year 2018 – 2019 the last date for filing is 29th September 2019||Signed and scanned copy of financial statements|
Income tax Return
Firstly, it is significant to note that for taxation, the similar provisions are valid on One Person Company as for the private company. It is because the Income Tax Act, 1961 is really silent about this OPC concept. Secondly, as in the private company, the income is taxed at a flat rate of roughly about thirty percentage, along with educational cess plus the surcharge as valid. Furthermore, the Minimum Alternative Tax (MAT) provision is applicable to One Person Company.
Along with yearly tax return filing, each One Person company needs to get the accounts audited properly under the Income Tax Act 1961 if the turnover exceeds the limit as mentioned in Section 44AB.
Also, the OPC may require complying with the GST regulations, TDS regulations, ESI, and PF regulations and others as per the requirements.
With OPC registration, the owner can avail the complete profitability of the company under the Companies Act 2013. Furthermore, it is important for One Person Company to maintain the OPC compliance with Companies Act as well as the Income Tax Act, and other regulations if applicable.
In cases, you are not able to comply with the OPC compliance requirements, you can consult the best professionals in the market. Swarit advisors ensure timely compliance at nominal charges. Therefore, don’t delay, contact us.