Annual Compliance for OPCs: Best Practices to Stay Compliant and Efficient

A One Person Company (OPC) is a unique type of business entity introduced under the Companies Act 2013. It allows a single individual to form a company and enjoy the benefits of a corporate structure while avoiding many of the complexities associated with traditional business structures. However, despite being simpler, Annual Compliance For Opc are required to follow certain obligations to stay compliant with legal and regulatory requirements.

1. Annual Return Filing (MGT-7A)

Every OPC must file an annual return in Form MGT-7A, a simplified form designed for OPCs and small companies. This return contains details of the management, financial summary, and shareholders. It should be filed with the Registrar of Companies (RoC) within 60 days of the conclusion of the Annual General Meeting (AGM).

Due Date: Within 60 days from the date of AGM or the due date of AGM (which is six months from the end of the financial year).

2. Financial Statement Filing (AOC-4)

The OPC's financial statements must be filed in Form AOC-4. This form includes the balance sheet, profit and loss account, and other related financial documents. It is crucial to get these statements audited by a Chartered Accountant.

Due Date: Within 180 days from the closure of the financial year (typically, the due date is 27th September).

3. Income Tax Returns

OPCs must file their income tax returns by the prescribed date. The tax rates for OPCs follow the same guidelines as those applicable to private limited companies, and any profits are taxed at a flat rate of 25-30%, depending on the turnover.

Due Date: 30th September of the relevant assessment year.

4. GST Filings

If the OPC is registered under GST, it needs to file monthly or quarterly GST returns (depending on the turnover). Additionally, an annual GST return (GSTR-9) summarizing all the transactions must be filed.

Monthly/Quarterly Returns: GSTR-1 and GSTR-3B.

Annual Return: GSTR-9 (if applicable).

5. Board Meetings

An OPC with more than one director is not required to hold board meetings. However, if the company has more than one director, it must hold at least two board meetings each year. The gap between these meetings should be, at most, 90 days.

6. Audit of Accounts

Just like other companies, an OPC is required to get its financial accounts audited. The appointment of an auditor is mandatory, and the auditor must audit the books of accounts and submit a report.

7. Director's Report

A Director's Report must be attached along with the financial statements. This report highlights the financial status of the company and other related information such as risks, plans, etc.

8. Other Compliance

KYC of Directors: Every director of an OPC must file DIR-3 KYC annually to update their KYC information with the Ministry of Corporate Affairs (MCA).

Form DPT-3: If the company has accepted deposits, Form DPT-3 needs to be filed. It is a declaration of the return of deposits or outstanding receipt of money.

Penalties for Non-Compliance

Failure to comply with the annual compliance requirements can result in penalties for the OPC. These penalties can range from fines for late filings to disqualification of directors or even legal actions against the company.

Conclusion

While an OPC offers flexibility and control to a single person, it’s essential to adhere to the annual compliance requirements to maintain the company’s legal standing. Timely filing of forms, keeping proper records, and staying updated with legal requirements can help avoid hefty penalties and ensure smooth business operations.