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One Person Company's Annual Compliance
The Companies Act 2013 is responsible for corporate governance in India. A One Person Company (OPC) is a business structure that allows a single individual to own and manage a company with limited liability. OPCs, like any other company incorporated in India, are required to comply with some specific legal and regulatory obligations. These obligations are mandatory, and non-compliance with them can lead to hefty penalties and repercussions.
Annual compliance for OPCs includes holding an annual general meeting (AGM) and filing an annual financial statement for the company, including its balance sheet and profit and loss account, to the Registrar of Companies (RoC). These filings are filed in different forms, such as AOC-4, MGT-7, etc. Annual compliance not only ensures that the company adheres to statutory provisions but also helps maintain a good reputation in the eyes of stakeholders and investors.
Importance of Filing Annual Compliance for an OPC
Annual Compliance with an OPC has several advantages, including:
- Filing your annual compliance ensures that your OPC follows the rules set by the Companies Act, 2013.
- If you miss the required filings, the RoC may strike your OPC off the official register, which can shut down your business.
- Regular and timely filings show that your company operates transparently and responsibly. They also boost your credibility with investors, banks, and other business partners.
- Missing compliance deadlines can result in fines, which can impact our business.
- Proactive compliance minimizes the risk of investigations, audits and operational disruptions.
Annual Compliances for OPC
A One Person Company (OPC) is required to fulfil specific annual compliance obligations as outlined in the Companies Act, 2013, to avoid penalties or deregistration. Key compliances are:
- Business Commencement Declaration (INC‑20A)
- Auditor Appointment (ADT‑1)
- Conduct Board Meetings
- Maintain Statutory Registers and Minutes
- File Audited Financial Statements (AOC‑4)
- File Annual Return (MGT‑7/MGT‑7A)
- Director KYC (DIR‑3 KYC)
- Income Tax Return Filing
1. Business Commencement Declaration (INC‑20A)
It is not mandatory to file INC-20A every year, but after a company is incorporated, it is not considered to have commenced business. Form INC 20A is the document through which an OPC declares that it has received its subscription money and is ready to begin its activities. INC‑20A must be filed within 180 days from the date of incorporation, and it contains the following:
- Declaration by the director which confirms that the company has commenced its business operations
- The date on which the company actually started its business operations
- Information on the receipt of the subscription money by the company
- A declaration that the company’s incorporation documents and all conditions stipulated under the Companies Act, 2013, and the Companies (Incorporation) Rules, 2014, have been duly complied with before commencing business.
2. Appointment of Auditor (ADT-1)
Section 139 of the Companies Act, 2013, mandates the appointment of a practicing Chartered Accountant as a statutory auditor in a company. If the first auditor is appointed during or immediately after the incorporation of the OPC, there is no requirement to file an ADT-1. However, if the auditor is appointed subsequently, the ADT-1 form shall be filed online at the MCA portal within 30 days from the date of the auditor's appointment.
3. Conduct Board Meetings
An OPC is required to hold at least one board meeting in each half of the calendar year. For companies with only one director, a written resolution entered in the minutes book is considered equivalent to holding a board meeting. As per section 173 (5) of the Companies Act, 2013, there should be a gap of at least 90 days between the board meetings.
4. Maintain Statutory Register and Minutes
As per the Companies Act, 2013, an OPC is required to maintain various statutory registers of members, showing separately the class of equity and preferential shares held by each member, debenture-holder, and any other security holder, and to keep accurate minutes of board and general meetings.
5. File Audited Financial Statement (AOC-4)
As per section 137 of the Companies Act, 2017, the OPCs have to submit their Financial Statements (Form AOC-4) to the ROC 30 days from the date of the Annual General Meeting (AGM). This form contains the following information:
- Financial Statement including Balance Sheet, Profit & Loss Statement, Cash Flow Statement.
- Certification by the Director
- Any transactions between the company and its related parties, such as directors or their family members, should be adequately disclosed.
- Corporate Social Responsibility of the Company
- Secretarial Audit Report
- Statement of Subsidiaries
- Independent Auditor’s Report that confirms that the financial statements are true.
6. File Annual Return (MGT-7/MGT-7A)
Annual Return provides detailed information about the shareholding, directors, business activities, and financial performance of the company over a year. It contains the following information:
- Its registered office, principal business activities, holding, subsidiary, or associate companies (if any).
- Details of the company’s share capital, including changes in shareholding during the year.
- Details of directors and key managerial personnel, including their remuneration and any changes such as appointments or resignations.
- Summary of the share distribution, including details of equity, preference shares, and any debentures or securities issued.
- Information regarding any deposits received, loans taken, or financial obligations
- Penalty or punishment imposed on the company or its directors and details of compounding offence and appeals made by the company
MGT-7 is a standard form used to file annual returns for the company, and the MGT-7A form is used to file annual returns specifically for small companies as defined under the Companies Act, 2013.
7. Director KYC (DIR 3 KYC)
All directors of OPC who hold a Director Identification Number (DIN) are required to update their personal and professional details with the Ministry of Corporate Affairs using the DIR-3 KYC form, which they must file by September 30th each year.
For first-time filings, directors must submit their DIR-3 KYC form via the MCA portal. If a director’s contact number and personal information remain unchanged, the DIR-3 KYC Web form will be used afterward. However, if any details have changed, the standard DIR-3 KYC form must be filed.
8. Income Tax Return
In addition to ROC filings, an OPC must also comply with the Income Tax Act, 1961, by filing its income tax return. ITR-6 is filed by the OPC to include the disclosure of income, deductions, and tax liability in a financial year.
Documents Required for OPC Annual Compliance Filing
You need the following documents for OPC Annual Filing Compliance:
- PAN, Corporate Identification Number, Registered Office Address of the Company.
- List of the activities/Business activities or operations carried out by the Company during the financial year.
- Name, address, and contact details of the sole shareholder.
- Shareholding details (even though there is only one member, this still needs to be recorded).
- Name, address, and contact details of the sole director of the OPC.
- Director Identification Number (DIN) of the director.
- A declaration from the Director of the company confirming the company’s compliance with the Companies Act, 2013.
- Declaration regarding Directors' interests in the company, if applicable.
- List all securities the corporation has, including any preference shares, convertible securities, etc.
- List of shares and debentures issued during the year, including changes in the issued capital.
- Detailed document containing information about the management of the company, such as new appointments and resignations.
- A statement showing the company's financial position, including assets, liabilities, and equity, as of the end of the financial year.
- A summary of income, expenses, profits, and losses for the financial year.
- A report showing the inflows and outflows of cash in the business (not mandatory for OPCs unless required by accounting standards).
- A report signed by the director (usually the sole shareholder/director in OPC) confirming the accuracy of the financial statements.
- An independent auditor’s report confirms that the financial statements comply with accounting and legal standards (if the company has appointed an auditor).
- A copy of the AGM minutes or signed resolutions documenting approval of the financial statements and auditor’s appointment.
- The signed resolution passed by the sole member or the director approving the financial statements for the year
- A copy of the filed ITR form for the relevant year, confirming the company has paid its taxes.
- A copy of the audited financial statements (Balance Sheet, Profit & Loss account) submitted with the Income Tax Return.
- For Director KYC and Shareholder KYC norms: (Aadhar card or Passport of the Director, PAN Card of the Director, Proof of Address of the Director, Recent two photographs of the Director)
- Any changes in the shareholding pattern throughout the year.
- Details of Any Securities Transfer (if applicable).
Due Dates for Filing OPC Annual Compliances
|
Compliance |
Form/Reference |
Due Date/Timeline |
|
Business Commencement Declaration |
INC‑20A |
Within 180 days of incorporation |
|
Auditor Appointment (subsequent appointments) |
ADT‑1 |
Within 30 days of the auditor’s appointment |
|
Board Meetings |
At least once per half-year; gap of 90 days required |
|
|
Maintaining Statutory Registers and Minutes |
Ongoing |
|
|
Audited Financial Statements |
AOC‑4 |
Within 180 days from the financial year-end |
|
Annual Return Filing |
MGT‑7/MGT‑7A |
Within 60 days after the AGM or within 180 days from year-end |
|
Director KYC |
DIR‑3 KYC (or DIR‑3 KYC Web) |
By 30th September each financial year |
|
Income Tax Return Filing |
ITR‑6 (typically) |
By 31st July of the assessment year |
Penalties for Not Filing Annual Compliance for OPC
|
Compliance |
Penalties and Consequences for Untimely Submission |
|
Annual Return: MGT-7 |
|
|
Financial Statements: AOC-4 |
|
|
DIR 3 KYC (or DIR 3 KYC Web) |
|
|
Failure to comply with the Annual Filings |
|
Why Choose Kanakkupillai for OPC Annual Compliance?
As a leading online legal services provider in India, Kanakkupillai focuses on One Person Company (OPC) registration and compliance. Our industry-specific uniqueness comes from our dedication to quality and client satisfaction.
- Expert advice: Our professional compliance team is committed to helping you at every stage of the compliance process. We make sure you receive the help you need.
- Correct Guidance: We help you understand legal obligations confidently by offering quick and accurate compliance-related advice. Being proactive helps reduce non-compliance risk.
- Customized Solution: At Kanakkupillai, we provide tailored solutions that meet your OPC's particular requirements. Our services are designed to match clients' needs to guarantee the best results.
- Affordable Services: We believe in giving the company the best result, and therefore, our services are reasonably priced so that you can focus on growing your business, not the finances.
- Hassle-Free Compliance Process: Our staff manages all paperwork and legal requirements so you may concentrate on expanding your company.
For your OPC compliance requirements, choose Kanakkupillai for a smooth, encouraging path to maintaining your company's legal status.
Frequently Asked Questions
What are the key annual compliance requirements for an OPC?
An OPC must file financial statements (AOC- 4), annual returns (MGT- 7/MGT- 7 A), income tax returns (ITR- 6), and director KYC (DIR- 3 KYC) and maintain statutory registers.Is it mandatory for an OPC to hold an Annual General Meeting (AGM)?
No, OPCs are exempted from holding AGMs, but they must comply with annual filings and ensure proper documentation of decisions made by the sole director.Does an OPC need to file DIR- 3 KYC every year?
Yes, the director of an OPC must file DIR- 3 KYC by 30th September each year to keep their Director Identification Number (DIN) active.Can an OPC voluntarily convert into a Private Limited Company?
Yes, an OPC can voluntarily convert into a Private Limited Company if it meets the eligibility criteria, such as crossing a turnover of ₹2 crore or exceeding ₹50 lakh in paid-up capital.What is the due date for filing income tax returns for an OPC?
An OPC must file Income Tax Returns (ITR- 6) by 31st July of the assessment year.Is appointing an auditor mandatory for an OPC?
Yes, OPCs must appoint a statutory auditor under Section 139 of the Companies Act, 2013, and file Form ADT- 1 in the event of a subsequent appointment.Can an OPC operate without compliance filings?
Non-compliance can lead to significant penalties, legal issues, and even the closure of the company by the RoC.We Provide Best Quality
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