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    Annual Compliances for Your One-Person Company

    OPCs are governed by the Companies Act of 2013 and must comply with various regulations to maintain their legal status. Annual compliances play a significant role in upholding the transparency and credibility of an OPC. These compliances encompass registration, financial statements, board meetings, audits, tax filings, and statutory registers and records maintenance.

    Registration and Incorporation

    The first step in establishing an OPC is registering it with the Registrar of Companies (ROC). The registration process involves obtaining a Director Identification Number (DIN) and Digital Signature Certificate (DSC) for the proposed director. The documents required for registration include the Memorandum of Association (MOA), Articles of Association (AOA), address proof of the registered office, and identity and address proof of the director.

    Annual General Meeting (AGM)

    OPCs must hold an Annual General Meeting (AGM) within six months from the end of the financial year. During the AGM, the director and members discuss the company’s performance, financial statements, and any other matters pertinent to the business. Compliance requirements for AGMs include:

    • Issuing notice to the members.
    • Preparing meeting minutes.
    • Filing the necessary resolutions with the ROC.

    Annual Financial Statements

    OPCs must create annual financial statements that include the balance sheet, cash flow statement, and profit and loss account. These statements comprehensively overview the company’s financial health and performance. OPCs are required to file these statements with the ROC within 30 days from the AGM. The financial statements must be prepared under the applicable accounting standards and provide an accurate and fair view of the company’s affairs.

    Board Meetings and Resolutions

    OPCs should conduct at least one board meeting in each half of the calendar year, with a gap of at least 90 days between the two meetings. Board meetings are crucial for decision-making and compliance purposes. Resolutions passed during these meetings must be duly recorded and maintained as minutes. OPCs must also maintain a register of board meetings and resolutions for future reference and compliance verification.

    Statutory Audits

    OPCs have 30 days from the date of incorporation to appoint a statutory auditor. The auditor’s responsible for reviewing the company’s financial records and offering an independent assessment of the financial statements. OPCs must file the auditor’s report with the ROC along with the annual financial statements. The audit report assures the stakeholders regarding the accuracy and reliability of the financial statements.

    Income Tax Returns

    OPCs are subject to income tax regulations, and filing income tax returns annually is mandatory. The due date for filing returns is generally July 31st of the assessment year. OPCs must maintain proper accounting records, including books of accounts, vouchers, and supporting documents. Compliance with the tax provisions of the Income Tax Act is crucial to avoid penalties and legal consequences.

    Compliance with GST

    If an OPC’s turnover exceeds the prescribed threshold, it must register for the Goods and Services Tax (GST). OPCs engaged in the supply of goods or services must collect and remit GST to the government. OPCs must file GST returns periodically, depending on their turnover. Compliance with GST regulations is essential to avoid penalties and maintain good standing with the tax authorities.

    Maintenance of Statutory Registers and Records

    OPCs must maintain various statutory registers and records per the Companies Act 2013. These registers include the Register of Members, Register of Directors, Register of Contracts, Register of Charges, and other relevant registers. OPCs must update these registers regularly and make them available for inspection by the concerned authorities. Proper maintenance of statutory records ensures transparency and compliance with legal requirements.

    Frequently Asked Questions

    Q1. What is the penalty for late filing of annual compliances for an OPC?

    A: The penalty for late filing of annual compliances for an OPC can vary depending on the specific non-compliance. It may range from monetary fines to the disqualification of the director. Filing the required documents within the prescribed deadlines is essential to avoid penalties.

    Q2. Can an OPC appoint a foreign director?

    A: Yes, an OPC can appoint a foreign director, provided the director has a valid Director Identification Number (DIN) and complies with other requirements per the Companies Act, 2013. Appointing a foreign director may also require compliance with applicable foreign investment regulations.

    Q3. Is it mandatory to conduct an AGM for an OPC?

    A: Yes, it is mandatory for an OPC to conduct an Annual General Meeting (AGM) within six months from the end of the financial year. The AGM allows the director and members to discuss the company’s performance, financial statements, and other essential matters.

    Q4. How often should an OPC file GST returns?

    A: The frequency of filing GST returns for an OPC depends on its turnover. OPCs with higher turnover need to file returns more frequently, while those with lower turnover have less frequent filing requirements. It is vital to comply with the prescribed timelines to avoid penalties and maintain compliance with GST regulations.

    Q5. What happens if an OPC fails to maintain statutory registers?

    A: Failure to maintain statutory registers can attract penalties and legal consequences for the OPC and its directors. OPCs are required to keep the register of members, directors, contract register, and other relevant registers updated and available for inspection. Proper maintenance of these registers is essential for compliance and transparency.

    Q6. Can the sole member of an OPC be a corporate entity?

    A: No, as per the Companies Act 2013, only an individual can be the sole member of an OPC. A corporate entity or another OPC cannot hold the membership of an OPC.

    Q7. Can an OPC be converted into a public or private limited company?

    A: If specific requirements are met, an OPC may be transformed into a private or public limited company. The conversion process involves altering the Memorandum of Association (MOA) and Articles of Association (AOA) and complying with the legal requirements.

    Q8. Are there any restrictions on the number of OPCs a person can form?

    A: As per the Companies Act 2013, an individual can be a member of only one OPC at a time. If a person becomes a member of more than one OPC, they must relinquish the membership in the extra OPCs within a prescribed period.

    Q9. What are the requirements for maintaining a registered office for an OPC?

    A: An OPC must have a registered office within India to which all official communications and notices can be sent. The registered office must be a physical address where the company’s books of accounts and records are kept.

    Q10. Can an OPC voluntarily convert itself into a partnership or a sole proprietorship?

    A: Yes, an OPC can be voluntarily converted into a partnership firm or a sole proprietorship if the OPC meets the necessary legal requirements and follows the conversion procedures prescribed by law.

    Q11. Are OPCs eligible for government schemes and incentives?

    A: Yes, OPCs can avail of government schemes and incentives based on their business activities and compliance with the eligibility criteria. Various initiatives, such as Startup India, may benefit OPCs in terms of funding, tax exemptions, and other support.

    Q12. Can an OPC be converted into a Section 8 company?

    A: Yes, a Section 8 company, a type of nonprofit organization, can be created from an OPC. The conversion process involves complying with the provisions of the Companies Act 2013 and obtaining the necessary approvals from the concerned authorities.

    Q13. Is an OPC required to appoint a Company Secretary?

    A: No, OPCs are exempted from the requirement of appointing a Company Secretary. Unlike other companies, OPCs do not need a mandatory Company Secretary.

    Q14. Can an OPC be converted into a multi-member private limited company?

    A: Yes, if an OPC satisfies the requirements and follows the conversion procedures outlined in the Companies Act of 2013, it may convert into a multi-member private limited company.

    Q15. Can an OPC issue shares or raise funds from the public?

    A: No, an OPC cannot issue shares or raise funds from the public through the issuance of a prospectus. OPCs are restricted to having only one shareholder and cannot invite the public to subscribe to their shares.


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