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OPC Annual Compliance

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    OPC Annual Compliance

    A One Person Company (OPC) in India is a business structure that allows a single individual to establish and operate a company under the provisions of the Companies Act, 2013. This concept was introduced to support entrepreneurs who are capable of starting a venture by allowing them to create a single-person economic entity. Before this Act, at least two directors and shareholders were required to form a company.

    One Person Company (OPC) is a company with only one individual as its member or shareholder. OPC registration is carried out when only one member or promoter exists for the business. This type of registration is preferred by many entrepreneurs over sole proprietorship businesses due to the numerous advantages that OPCs offer.

    One-Person Company Compliances

    One Person Company (OPC) Compliances refer to the legal requirements that a company with a single owner must fulfill to maintain its active status as a separate legal entity. Every year, all registered OPCs must file an annual return and audited financial statements with the Ministry of Corporate Affairs (MCA), regardless of their turnover. These OPC compliance filings are used to report the company’s activities and financial data for the previous financial year. The annual filing deadline depends on the Annual General Meeting date. Failure to comply with OPC requirements can lead to the company’s name being removed from the RoC’s register and the disqualification of its directors. The MCA has enforced strict action against non-compliance in the past.

    Here are some key features of an OPC:

    • Single Shareholder: An OPC has only one member or shareholder, distinguishing it from other types of companies which require at least two shareholders.
    • Management and Ownership: The same individual holds complete control over the company, managing its operations while also owning all the company’s shares.
    • Directors: While an OPC can have only one member, it can appoint up to fifteen directors to facilitate its business operations, a number that can be increased beyond fifteen through a special resolution.
    • Legal Status: An OPC is registered as a private limited company. This classification subjects it to all legal provisions applicable to private limited companies, including specific compliance requirements related to annual filings, financial statement audits, and more.
    • Advantages Over Sole Proprietorship: An OPC provides limited liability protection to its sole owner, separating personal assets from the business’s liabilities. This is a significant advantage over a sole proprietorship, where personal assets can be at risk in case of business failure.
    • Compliance Requirements: Like other private limited companies, an OPC must comply with various statutory requirements set out by the Companies Act. These include filing annual returns, maintaining books of accounts, and other regulatory compliances.

    Mandatory Compliance for OPC Annual Filing:

    • Conducting Annual General Meeting (AGM): OPCs must conduct an AGM within six months from the end of the financial year. It is mandatory to hold an AGM even if only one director in the OPC exists to comply with OPC annual compliance regulations.
    • Filing Financial Statements: OPCs must prepare financial statements such as balance sheets, profit and loss, and cash flow statements and file them with the Registrar of Companies (ROC) within 30 days of the AGM.
    • Filing Income Tax Returns: OPCs must file income tax returns by July 31st of each year.
    • Filing Annual Return: OPCs must file an annual return with the MCA within 60 days of the AGM.
    • Statutory Audit: OPCs must conduct a statutory audit of their financial statements by a qualified Chartered Accountant
      Maintenance of Statutory Registers and
    • Records: OPCs must maintain various statutory registers and records, such as the register of members, register of directors, and minutes of board meetings.

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