One person company [OPC] compliances

Meaning of one-person company

One person company is where the company can be started with 1 director and 1 member or both. It is governed by the Companies Act 2013. This kind of company was introduced to encourage small businesses who can enjoy the benefits of both company and sole proprietorship features.

Advantages of one-person company

• It is easy to raise funds for OPC company as it is a private company and financial institutions would like to invest in these types of companies.
• As OPC is a private company, it enjoys separate legal status from its member, and liability is limited to the contribution of its member.
• To start OPC, you require just 1 member who can play both the roles as director and member, and the procedure for registration is simple and less time-consuming.
• Management of OPC is simple, as it is formed by a single person and there is no conflict in decision making like in other companies.
• It has perpetual succession, while registering the member should appoint a nominee to continue business after his or her retirement or death.
• Compliances for OPC come with certain exemptions which are provided by the Companies Act 2013, for the benefit of OPC.

These are the advantages of starting one personal company

What are the Compliance for OPC

The Companies Act 2013 has provided simple compliances which should be followed by the company such as,

1. The financial year for OPC company starts from 1st of April and ends on 31st of March every year.
2. The company must conduct board meetings twice in the year [ half-yearly once] and the gap between 2 meetings should not be less than 90 days.
3. After incorporation of a business, the company should file form INC 20A with the ROC for commencement of business within 180 days.
4. Stamp duty should be paid within 30 days of issuing the share certificate.
5. The company should file MBP – 1 for disclosure of interest of directors in a first board meeting or whenever there are changes in directors.
6. Form DIR – 8 should be filed every financial year by the directors stating that they are qualified.
7. The company should compulsorily maintain statutory registers, minute books, and other required records of the company.
8. Form AOC-4 should be filed by the company from the end of the financial year within 180 days and this form is about filing financial statements.
9. Annual returns of the company should be filed every year and the end of the financial year within 180 days by filing form MGT -7.
10. The company should file an income tax return every year on or before September 30th.
11. The director of the company should file DIR – 3 KYC to ROC on or before the 30th of September.
12. The company should appoint an auditor every 5 years.
13. The company should file an MSME e form if it has outstanding dues for micro-business with exceeds for more than 45 days.
14.  The company should file e form DPT – 3 which is about outstanding loans as of 31st of March.
15.  The company is not required to file an annual return within 60 days of AGM.

These are the compliance for OPC to be fulfilled with the MCA