Ensuring timely compliance is not only a legal requirement but also helps maintain the credibility and financial health of your business. Let’s explore the critical aspects of annual compliance for OPC and understand why they are essential.
What is an OPC?
A One Person Company is a unique concept introduced under the Companies Act, 2013, allowing a single individual to own and run a company. It combines the benefits of a sole proprietorship with the advantages of a corporate structure. The liability of the owner is limited, and the business enjoys perpetual succession, even though there is only one member.
Why Annual Compliance is Crucial for OPCs
Complying with the annual regulations ensures the business stays on the right side of the law. Failing to do so can attract hefty penalties, legal scrutiny, and even disqualification of the director. Moreover, businesses looking for funding or partnerships must maintain transparent and updated financial records — which is only possible through consistent compliance.
List of Mandatory Annual Compliances for OPC
Below is a detailed list of the key annual compliances for OPC in India:
1. Filing of Annual Return (Form MGT-7A)
- Due Date: Within 60 days from the date of the Annual General Meeting (AGM), though OPCs are not required to hold AGMs.
- Details Required: This form includes information such as shareholding structure, changes in directorship, and other company matters.
2. Filing of Financial Statements (Form AOC-4)
- Due Date: Within 180 days from the end of the financial year (i.e., by 27th September for financial year ending 31st March).
- Details Required: This form requires audited financial statements, including the balance sheet, profit and loss account, cash flow statement, and auditor’s report.
3. Appointment of Auditor
- An OPC must appoint a Chartered Accountant as its statutory auditor within 30 days of incorporation.
- The auditor will audit the financial records and provide the Auditor’s Report, essential for filing Form AOC-4.
4. Maintenance of Statutory Registers and Books of Accounts
- OPCs are required to maintain updated registers such as the Register of Members, Register of Directors, and Minutes Book.
- Proper books of accounts must be maintained at the registered office, either in physical or electronic format.
5. Income Tax Return Filing
- OPCs must file their income tax return annually using Form ITR-6.
- Due Date: 31st October if audit is applicable; otherwise, 31st July.
6. Other Event-Based Compliances
Apart from regular filings, OPCs must also fulfill certain event-based compliances such as:
- Change in registered office address
- Appointment or resignation of directors
- Change in authorized or paid-up share capital
These must be reported to the Registrar of Companies (RoC) within the specified timelines using appropriate forms like DIR-12, INC-22, etc.
Penalties for Non-Compliance
Non-compliance with OPC regulations can attract serious penalties:
- For Directors: A fine of up to ₹50,000 and ₹500 for each day of default.
- For the Company: Penalties for each lapse or delay in submission of forms.
- Continuous non-compliance can even lead to the striking off of the company from RoC records.
Benefits of Staying Compliant
- Avoid Legal Troubles: Meet all legal obligations without fear of penal action.
- Build Trust: Enhance your credibility with investors, banks, and other stakeholders.
- Business Continuity: Smooth operation without government intervention.
- Easy Loan Approval: Well-maintained compliance records help in getting loans and financial aid easily.
Conclusion
Annual compliance for OPC is not just a statutory formality but a necessity to ensure legal standing, financial discipline, and overall goodwill of the business. Many entrepreneurs tend to overlook these requirements, often resulting in avoidable penalties. If you're an OPC owner, make it a priority to stay compliant, maintain transparent records, and seek professional help when needed.
Whether you are a startup founder or an established solo entrepreneur, meeting annual compliance requirements is a crucial step toward business sustainability and growth.