Compliances to be made by a One-Person Company

Compliances to be made by a One-Person Company

As the name implies, one-person company (OPC) is a kind of Private Company that can only be established by an Indian resident who is a Natural Person. In Section 2(62) of the Companies Act of 2013, an OPC is defined as a company with one member. An OPC's management is likewise entirely under the control of one individual who owns all of the business's shares. In this post, Lawgical Adda will go over the various routine compliances and those that become necessary for a one-person company upon incorporation. 

One Person Company

A one-person company (OPC) is a business in which there is just one member or stakeholder. OPC registration is completed when a business has just one member or promoter. OPCs have many benefits over sole proprietorships, which is why many entrepreneurs select this type of registration.

Compliances for One-Person Company Following Incorporation

Common Seal

Two rubber stamps are necessary: one with the firm's name etched in a round shape and another with the company name and the authorised signatory's designation. These stamps are necessary to authenticate additional documents for compliance.

Letterhead for OPC

Following OPC incorporation, a few formal documents must be prepared. The company's name and registered office address must appear on all official correspondence, including invoices, notices, and letterhead.

Creating a New Bank Account

One of the first steps after incorporating a business is to create a current account with a nationalised or private bank to conduct transactions under the company's name. Today, MCA also makes opening a business bank account easier, streamlining operations and reducing paperwork.

Application of PAN/TAN

The NSDL Portal's form 49A must be used to apply online for a PAN card. It must be properly signed by one of the company's directors. You must have a PAN card to open a bank account in the company's name.

The Statutory Auditor is appointed.

One Person Company must designate a statutory auditor within 30 days of the company's incorporation date, just like any other business. To audit the company's financial accounts, the director must designate an auditor who is a licensed professional accountant. Form ADT-1 must be submitted to the MCA within 15 days of the auditor's appointment date for any further appointment of the auditor. No form is needed to file for the initial auditor appointment.

Securities Allotted

Share certificates attesting to the company's ownership must be issued following the company's incorporation. Each share certificate needs to bear an impression of the company's common seal and be properly signed by the director or another designated individual.

Why is annual compliance with OPC requirements so important?

It's not easy being a one-person business owner. People who are considering starting a business often need to be made aware of the crucial legal requirements that must be met; if these are met, the business risks paying heavy fines. In addition to fines, the business and its directors might have to submit to an undertaking and additional investigation.

That being said, it is important to note that a One-Person Company can begin completing the annual compliances immediately upon incorporation—penalties and fines associated with noncompliance cause the business to face several obstacles. Lawgical Adda will help you avoid these easily!

Recurring OPC compliance

Meetings 

Section 173 of the Companies Act, 2013, requires every one-person company to convene at least one board meeting every six months, with a minimum of ninety days separating these two meetings. Call these meetings only if a company has one director; the owner can fulfill the requirement by passing the resolution and recording it in the minutes book. 

Notification of interest

The company director must disclose his interests in other entities every financial year at the first board meeting. He needs to disclose any changes in interest. To receive such notice, fill out Form MBP-1. Penalty: A director who violates this policy faces a maximum one-year sentence in jail.

Statements of finances

One-person businesses must prepare and file the following financial statement with the ROC in prescribed form AOC-4 within 180 days of the fiscal year's end.

1. Sheets of balances
2. Profit and Loss Account
3. The Director must sign any explanatory note included in a financial statement.

Filing of an annual return

After the fiscal year, all one-person businesses must file an annual return with the ROC in the appropriate form MGT07 by September 30 of each year. The company secretary should sign it; a director may sign the document if there isn't a secretary.

Income Tax Return

A one-person company must file income tax returns on form ITR-6 with the income tax department. The 30th business day of the assessment year is the deadline.

State insurance registration of employees

This aligns with the 1948 Employees State Insurance Registration Act (ESI Act).

If a firm employs more than ten people, it must register under the ESI Act, 1948, just like any other business entity, even a one-person company.

GST statement

If a one-person company is registered for GST, it has to file a GST return. The deadline for filing a GST return varies by state, and returns are typically made once a month.

KYC of the company's director

Individuals who hold a DIN as of March 31st of the fiscal year are required by regulations to complete Form DIR-3-KYC for that fiscal year by September 30th of the following fiscal year.

Submitting the DPT-3 form

Every corporation must submit Form DPT-3 by June 30th every year. This form includes the Return of deposits and information that, as of March 31st, is not regarded as a deposit.

The Statutory Register's preparation

Section 88 of the Companies Act 2013 mandates that one individual or company keep statutory records. OPCs also have to adhere to a number of event-based specifications, such as:

1. Director Appointment or Resignation for Share Transfer
2. Alteration in Bank Signatories or Nominee
3. Change in Auditor.

OPC records its annual fiscal summaries for ROC using AOC 4. If Form AOC 4 is not deposited on time, a heavy fine of Rs 100 per day is assessed. Additionally, the business charges a price of Rs. 1000 for each day of default, with the maximum amount being Rs. 10 00,000.

MSME-I E-Form (Half-Yearly Return)

All companies that owe money to micro and small businesses and whose payments are past due by more than 45 days must provide information according to the schedule below:

1. For April through September, by October 31st
2. October through March by April 30.

Extra Compliances

1. Directors' Report: The director's report must include information specific to small businesses.
2. Circulation of Financial Statement and Other Relevant Documents: At least 21 clear days before the date of the AGM, the Company shall give the Members the approved Financial Statement, the Directors' Report, and the Auditors' Report.
3. Statutory Register: The company must keep up to date the related party transaction register, the director shareholding register, and the director register.

Our knowledgeable and skilled personnel at Lawgical Adda are always available to assist you with any questions regarding Annual Compliance and related services. If you contact us, our staff of knowledgeable experts will promptly update you on the progress of the endeavor and ensure that it is finished effectively.