OPC Annual Compliance and Exemption

OPC Annual Compliance and Exemption. Overview:
One person Company means a company which is completely governed and controlled by an Individual Person. In the management of OPC, all acts, activities and decisions making is done by an Individual person. Individual person holds 100% stake in the OPC and all-important decisions with regard to OPC management are taken by only one person who is also the director of the Company in most cases. However, an OPC can have more than one Director on its Board. Section 2(62) of Companies Act 2013 defines OPC as a company which has only one person as a member.
In accordance with the provisions of the act all provisions applicable to private companies are also applicable on OPC. OPC needs to comply some provisions for Annual Compliance for every year. Hence ROC Filing for One person Company (OPC) is mandatory. In this article we are discussing about following points:

Annual Compliance Checklist for OPC

OPC Compliance After Incorporation

Exemption to OPC in Compliance

How Compliance Calendar can help

Annual Compliance Checklist for OPC
OPC needs to comply with some yearly annual compliance, failure of which may attract some penalties as per the Companies Act, 2013.
· Board Meeting
It is required as per the provisions of Section 173(5) of the Companies Act, 2013 that a One Person Company must conduct at least one board meeting (BM) in each half of the calendar year. In simple it means that one meeting is required to be conducted between the period from January to June and another meeting between the period from July to December. Further, the time gap between two board meetings must not be less than the period of 90 days. Provisions of section 173 and 174 (Quorum of Meeting of BOD) will not apply to an OPC. In simple words, it means that one meeting is required to be conducted between the period from January to June and another meeting between the period from July to December. Further, the time gap between two board meetings must not be less than the period of 90 days.
· Appointment of Auditor
As per Section 139 of Company Act 2013 One Person Company is required to appoint Auditor and mandatorily required to get its books of accounts audited by Chartered Accountant/CA Firm.
· Disclosure of Interest in Other Entities
Every Director of OPC is required to disclose his interest in other entities in its first meeting of Board of directors in every financial year. The Disclosure is given under Form MBP-1 as prescribed under section 184 of Companies Act, 2013. The Declaration is also required to give in form DIR-8 that director is not disqualified is required to be given in every financial year.
· ROC Filing
All OPC are required to file Form AOC-4 (Financial Statements) within 180 days from the end of financial year and Form MGT-7A (Annual Return) within 60 days from the completion of 6 months from the end of the financial year.
· KYC of DirectorEvery director holding DIN as on 31st March of the financial year have to do their Director KYC in Form DIR-3-KYC or DIR-3 KYC-WEB for the said financial year on or before 30th September of the next financial year.
Penalty: Rs, 5000/- if DIN KYC is not filed till Sep 30.
· Filling of Income Tax Returns:
Every OPC required submitting its income tax return of its business transacted in every financial year.
OPC Compliance After Incorporation (Post Incorporation Compliance of OPC):
After Incorporation, every OPC needs to comply following compliances:
1. Bank account: OPC Needs to Open a bank account in the name of its company for making transactions. Following documents needs to be required to open your OPC current account.  It includes:

Memorandum of Association (MOA)

Articles of Association (AOA)

Certificate of Incorporation

Board Resolution of the company

Copy of PAN allotment letter

KYC of Promoters

2. Depositing of share capital money into the bank account within 60 days of the incorporation and Filing of INC-20A within 180 days: Every Company including OPC is required to deposit the subscription money to the company and file INC-20A Commencement of Business Form.
3. Registered office: Every OPC shall have a registered office to operate its business. In this regard OPC shall require to inform to the Registrar of companies about the registered office within 30 days of incorporation in Form INC-22 along with the fee. Kindly note that if at the time of incorporation, registered office documents have been filed, there is no need to file INC-22 separately.
4. Name affixed: Every OPC is required to affix its name, address of registered office, CIN of the OPC along with contact no. email and website details if any at every place of its office or at any other place where the operation of the OPC is carried on. OPC shall mention the word One Person Company as (OPC) in brackets before Private Limited in the name of the company where its name is printed and affixed.5. Statutory Auditor: Every OPC is required to appoint an auditor for a period up to five years in the first AGM (shall be transacted in case of OPC as per 122(3) by filing a Form ADT-1 to the ROC within 15 days from his appointment date. 
Sub-section  (3)  of  section  122  provides  the  manner  in  which  such  businesses  are to be transacted in case of OPC.  It further deals  with the matters  which  are required to  be  transacted  by  an  ordinary  or  special  resolution  at  a  general  meeting  of members  pursuant  to  section  114.  Such  businesses  are  deemed  to  be  transacted when  the  resolution  is  communicated  by  the  member  to  the  company  and  entered in  the  minutes  book  required  to  be  maintained  under  section  118  and  signed  and dated by  the member. The  manner  of  communication  by  the  member  can  be  any  manner  prescribed under  sub-section  (1)  of  section  20  read  with  rule  35  of  the  Companies (Incorporation)  Rules,  2014.  The  date  of  signing  the  minutes  shall  be  deemed  to  be the  date  of  the  meeting  for  all  the  purposes  under  this  Act.  The  scope  of  Secretarial Standard  on  General  Meetings  (SS-2)  provides  that  the  said  standard  is  not applicable to OPC.
6. Interest disclosure: Every Director of OPC requires to disclose his interest in other entities in its first meeting of Board of directors in every financial year and any changes in the disclosures shall also to be inform at every first meeting of the company in every financial year. The Disclosure is given under Form MBP-1 as prescribed under section 184 of Companies Act, 2013.
7. Company Minutes Book & Statutory Registers: Every OPC has to maintain statutory Resisters such as Register of shares, Register of Member, Register of Directors etc. OPC is also required to maintain its Minutes of the Board Meetings and General Meeting.
8. Board Meetings: It is required as per the provisions of Section 173(5) of the Companies Act, 2013 that a One Person Company must conduct at least one board meeting (BM) in each half of the calendar year. In simple it means that one meeting is required to be conducted between the period from January to June and another meeting between the period from July to December. Further, the time gap between two board meetings must not be less than the period of 90 days. Provisions of section 173 and 174 (Quorum of Meeting of BOD) will not apply to an OPC.
9. ROC Filing: All OPC required to file Form AOC-4 (Financial Statements) within 180days from the end of financial year and Form MGT-7A (Annual Return) within 60 days from the completion of 6 months from the end of the financial year.
10. KYC of Directors: Every director holding DIN as on 31st March of the financial year have to do their Director KYC in Form DIR-3-KYC or DIR-3 KYC-WEB for the said financial year on or before 30th September of the next financial year.
11. Filling of Income Tax Returns: Every OPC is required to submit its income tax return of its business transacted.
12. E-Form MSME-I (Half Yearly Return): Every OPC having any due payment to micro and small enterprises and in case the payment is not made within the period of 45 days then the OPC is required to file the details of the same in Form MSME within 30 days of ended of every half year.
13. E-Form DPT-3 (Return of Deposits): As per Rule 16 of Companies (Acceptance of Deposits) Rules, 2014 Every OPC who have any outstanding amount of loan at the end of the financial year shall have to provide the details of such outstanding loan in Form DPT-3 on or before the 30th day of June of every year.
Exemptions to OPC from Mandatory Compliance
OPC will be required to comply many compliances and provisions. OPC also have many exemptions as compared to private companies which are as follows:

One Director

OPC requires only one director to register its company and to operate its business. As compared to other company which requires at least two directors to register the company.
Please refer to the 122(4) of the Companies Act, 2013Notwithstanding anything in this Act, where there is only one director on the Board of Director of a One Person Company, any business which is required to be transacted at the meeting of the Board of Directors of a company, it shall be sufficient if, in case of such One Person Company, the resolution by such director is entered in the minutes book required to be maintained under section 118 and signed and dated by such director and such date shall be deemed to be the date of the meeting of the Board of Directors for all the purposes under this Act.

Holding of Annual General Meeting

As per section 96(1) of the Companies Act, 2013 One Person Company is not required to hold the Annual General Meeting of the company because OPC has only one member so it is not mandatory to conduct the AGM of the Company.

Holding of Board Meetings

it is required as per the provisions of section 173(5) of the companies act, 2013 that a one-person company must conduct at least one board meeting (bm) in each half of the calendar year. in simple it means that one meeting is required to be conducted between the period from January to June and another meeting between the period from July to December. further, the time gap between two board meetings must not be less than the period of 90 days. provisions of section 173 and 174 (quorum of meeting of bod) will not apply to an OPC.

Filling of Annual Returns

Annual Returns of the OPC can be signed by the Company Secretary and if there is no Company Secretary, then by the Director alone.

Signing of Financial Statements

The Financial statement and Board’s report of OPC can be signed only by one director because OPC can be registered by only one director.

Cash Flow Statement

A One Person Company not required to maintain Cash Flow Statement

Audit Reports and Auditors

OPC does not require filing of an Audit Report on internal financial controls with regard to financial statements and the operating effectiveness of such controls audit report. Companies (Auditor’s Report) Order, 2016 not applicable on OPC. Section 139(2) of the Company Act 2013, which mandates the rotation of auditors every 5 years (individual auditors) and every 10 years (firm of auditors) also not applicable on OPC.

Exemptions from applicability of Secretarial Standards

OPC requires only one director so the provisions of SS-1 and SS-2 is not applicable on OPC. However, if the OPC has more than one director, SS-1 will be applicable.

Exemptions for Board’s Report:

Rule 8 of companies (Accounts) Rules, 2014 in which matters to be included in Board’s Report are mention is not apply for OPC.

Exemptions for Signing of Financial statements

One Director can sign financial statements of the OPC.

Exemptions from applicability of Companies (Auditor’s Report) Order, 2016

Provisions of Companies (Auditor’s Report) Order, 2016 not applicable on OPC.
Conclusion
Annual Compliance of OPC is as important as its Registration. The most important feature of One Person Company is that while the characteristics regarding the ownership & control predominately resemble that of a proprietorship, the risks are limited to the value of shares held by such persons in the company. This would encourage entrepreneurial persons to take the challenge of doing business without bothering about liabilities getting to the personal assets.Last but not least, OPC Regulation is covered as under
“Clause 122.— This new clause seeks to provide that the provisions of some sections of Chapter VII i.e. Management and Administration, shall be applicable to One Person Company to the extent and the manner as provided under the clause.”
How Compliance Calendar can help?
OPC Annual Compliance is a legal and stringent process and therefore it is advisable to assign the work to a professionally managed firm. Compliance Calendar LLP has a team of professionals and can help you in annual compliance of One Person Company including other compliances after Incorporation like Filing of Forms, drafting and vetting of documents from anywhere in India. We have dedicated Professionals and therefore can manage each and every compliance of your OPC Business. We will help you ensure that all your compliance related deadlines are handled in consistent, timely and thorough manner and at the same time CCL can be your true guide to the proper Compliance.

Overview:

One person Company means a company which is completely governed and controlled by an Individual Person. In the management of OPC, all acts, activities and decisions making is done by an Individual person. Individual person holds 100% stake in the OPC and all-important decisions with regard to OPC management are taken by only one person who is also the director of the Company in most cases. However, an OPC can have more than one Director on its Board. Section 2(62) of Companies Act 2013 defines OPC as a company which has only one person as a member.

In accordance with the provisions of the act all provisions applicable to private companies are also applicable on OPC. OPC needs to comply some provisions for Annual Compliance for every year. Hence ROC Filing for One person Company (OPC) is mandatory. In this article we are discussing about following points:

Annual Compliance Checklist for OPC
OPC Compliance After Incorporation
Exemption to OPC in Compliance
How Compliance Calendar can help

Annual Compliance Checklist for OPC

OPC needs to comply with some yearly annual compliance, failure of which may attract some penalties as per the Companies Act, 2013.

· Board Meeting

It is required as per the provisions of Section 173(5) of the Companies Act, 2013 that a One Person Company must conduct at least one board meeting (BM) in each half of the calendar year. In simple it means that one meeting is required to be conducted between the period from January to June and another meeting between the period from July to December. Further, the time gap between two board meetings must not be less than the period of 90 days. Provisions of section 173 and 174 (Quorum of Meeting of BOD) will not apply to an OPC. In simple words, it means that one meeting is required to be conducted between the period from January to June and another meeting between the period from July to December. Further, the time gap between two board meetings must not be less than the period of 90 days.

· Appointment of Auditor

As per Section 139 of Company Act 2013 One Person Company is required to appoint Auditor and mandatorily required to get its books of accounts audited by Chartered Accountant/CA Firm.

· Disclosure of Interest in Other Entities

Every Director of OPC is required to disclose his interest in other entities in its first meeting of Board of directors in every financial year. The Disclosure is given under Form MBP-1 as prescribed under section 184 of Companies Act, 2013. The Declaration is also required to give in form DIR-8 that director is not disqualified is required to be given in every financial year.

· ROC Filing

All OPC are required to file Form AOC-4 (Financial Statements) within 180 days from the end of financial year and Form MGT-7A (Annual Return) within 60 days from the completion of 6 months from the end of the financial year.

· KYC of Director

Every director holding DIN as on 31st March of the financial year have to do their Director KYC in Form DIR-3-KYC or DIR-3 KYC-WEB for the said financial year on or before 30th September of the next financial year.

Penalty: Rs, 5000/- if DIN KYC is not filed till Sep 30.

· Filling of Income Tax Returns:

Every OPC required submitting its income tax return of its business transacted in every financial year.

OPC Compliance After Incorporation (Post Incorporation Compliance of OPC):

After Incorporation, every OPC needs to comply following compliances:

1. Bank account: OPC Needs to Open a bank account in the name of its company for making transactions. Following documents needs to be required to open your OPC current account. It includes:

Memorandum of Association (MOA)
Articles of Association (AOA)
Certificate of Incorporation
Board Resolution of the company
Copy of PAN allotment letter
KYC of Promoters

2. Depositing of share capital money into the bank account within 60 days of the incorporation and Filing of INC-20A within 180 days: Every Company including OPC is required to deposit the subscription money to the company and file INC-20A Commencement of Business Form.

3. Registered office: Every OPC shall have a registered office to operate its business. In this regard OPC shall require to inform to the Registrar of companies about the registered office within 30 days of incorporation in Form INC-22 along with the fee. Kindly note that if at the time of incorporation, registered office documents have been filed, there is no need to file INC-22 separately.

4. Name affixed: Every OPC is required to affix its name, address of registered office, CIN of the OPC along with contact no. email and website details if any at every place of its office or at any other place where the operation of the OPC is carried on. OPC shall mention the word One Person Company as (OPC) in brackets before Private Limited in the name of the company where its name is printed and affixed.

5. Statutory Auditor: Every OPC is required to appoint an auditor for a period up to five years in the first AGM (shall be transacted in case of OPC as per 122(3) by filing a Form ADT-1 to the ROC within 15 days from his appointment date.

Sub-section (3) of section 122 provides the manner in which such businesses are to be transacted in case of OPC. It further deals with the matters which are required to be transacted by an ordinary or special resolution at a general meeting of members pursuant to section 114. Such businesses are deemed to be transacted when the resolution is communicated by the member to the company and entered in the minutes book required to be maintained under section 118 and signed and dated by the member. The manner of communication by the member can be any manner prescribed under sub-section (1) of section 20 read with rule 35 of the Companies (Incorporation) Rules, 2014. The date of signing the minutes shall be deemed to be the date of the meeting for all the purposes under this Act. The scope of Secretarial Standard on General Meetings (SS-2) provides that the said standard is not applicable to OPC.

6. Interest disclosure: Every Director of OPC requires to disclose his interest in other entities in its first meeting of Board of directors in every financial year and any changes in the disclosures shall also to be inform at every first meeting of the company in every financial year. The Disclosure is given under Form MBP-1 as prescribed under section 184 of Companies Act, 2013.

7. Company Minutes Book & Statutory Registers: Every OPC has to maintain statutory Resisters such as Register of shares, Register of Member, Register of Directors etc. OPC is also required to maintain its Minutes of the Board Meetings and General Meeting.

8. Board Meetings: It is required as per the provisions of Section 173(5) of the Companies Act, 2013 that a One Person Company must conduct at least one board meeting (BM) in each half of the calendar year. In simple it means that one meeting is required to be conducted between the period from January to June and another meeting between the period from July to December. Further, the time gap between two board meetings must not be less than the period of 90 days. Provisions of section 173 and 174 (Quorum of Meeting of BOD) will not apply to an OPC.

9. ROC Filing: All OPC required to file Form AOC-4 (Financial Statements) within 180days from the end of financial year and Form MGT-7A (Annual Return) within 60 days from the completion of 6 months from the end of the financial year.

10. KYC of Directors: Every director holding DIN as on 31st March of the financial year have to do their Director KYC in Form DIR-3-KYC or DIR-3 KYC-WEB for the said financial year on or before 30th September of the next financial year.

11. Filling of Income Tax Returns: Every OPC is required to submit its income tax return of its business transacted.

12. E-Form MSME-I (Half Yearly Return): Every OPC having any due payment to micro and small enterprises and in case the payment is not made within the period of 45 days then the OPC is required to file the details of the same in Form MSME within 30 days of ended of every half year.

13. E-Form DPT-3 (Return of Deposits): As per Rule 16 of Companies (Acceptance of Deposits) Rules, 2014 Every OPC who have any outstanding amount of loan at the end of the financial year shall have to provide the details of such outstanding loan in Form DPT-3 on or before the 30th day of June of every year.

Exemptions to OPC from Mandatory Compliance

OPC will be required to comply many compliances and provisions. OPC also have many exemptions as compared to private companies which are as follows:

One Director

OPC requires only one director to register its company and to operate its business. As compared to other company which requires at least two directors to register the company.

Please refer to the 122(4) of the Companies Act, 2013

Notwithstanding anything in this Act, where there is only one director on the Board of Director of a One Person Company, any business which is required to be transacted at the meeting of the Board of Directors of a company, it shall be sufficient if, in case of such One Person Company, the resolution by such director is entered in the minutes book required to be maintained under section 118 and signed and dated by such director and such date shall be deemed to be the date of the meeting of the Board of Directors for all the purposes under this Act.

Holding of Annual General Meeting

Holding of Board Meetings

Filling of Annual Returns

Annual Returns of the OPC can be signed by the Company Secretary and if there is no Company Secretary, then by the Director alone.

Signing of Financial Statements

The Financial statement and Board’s report of OPC can be signed only by one director because OPC can be registered by only one director.

Cash Flow Statement

A One Person Company not required to maintain Cash Flow Statement

Audit Reports and Auditors

Exemptions from applicability of Secretarial Standards

OPC requires only one director so the provisions of SS-1 and SS-2 is not applicable on OPC. However, if the OPC has more than one director, SS-1 will be applicable.

Exemptions for Board’s Report:

Rule 8 of companies (Accounts) Rules, 2014 in which matters to be included in Board’s Report are mention is not apply for OPC.

Exemptions for Signing of Financial statements

One Director can sign financial statements of the OPC.

Exemptions from applicability of Companies (Auditor’s Report) Order, 2016

Provisions of Companies (Auditor’s Report) Order, 2016 not applicable on OPC.

Conclusion

Annual Compliance of OPC is as important as its Registration. The most important feature of One Person Company is that while the characteristics regarding the ownership & control predominately resemble that of a proprietorship, the risks are limited to the value of shares held by such persons in the company. This would encourage entrepreneurial persons to take the challenge of doing business without bothering about liabilities getting to the personal assets.

Last but not least, OPC Regulation is covered as under

“Clause 122.— This new clause seeks to provide that the provisions of some sections of Chapter VII i.e. Management and Administration, shall be applicable to One Person Company to the extent and the manner as provided under the clause.”

How Compliance Calendar can help?

OPC Annual Compliance is a legal and stringent process and therefore it is advisable to assign the work to a professionally managed firm. Compliance Calendar LLP has a team of professionals and can help you in annual compliance of One Person Company including other compliances after Incorporation like Filing of Forms, drafting and vetting of documents from anywhere in India. We have dedicated Professionals and therefore can manage each and every compliance of your OPC Business. We will help you ensure that all your compliance related deadlines are handled in consistent, timely and thorough manner and at the same time CCL can be your true guide to the proper Compliance.