OPC ROC Compliance

A private limited company requires a minimum of 2 directors and 2 members whereas a public limited company requires a minimum of 3 directors and 7 members. But, what about a single person who wants to open up a company for business? The Companies Act, 2013 contains a provision for such persons as well. They can incorporate a One Person Company (OPC). 

A One Person Company is a company incorporated by a single person. This type of company requires only one director as well as a shareholder who can be the same person.  The OPC company compliances are comparatively lesser than the private and public limited companies along with relaxations under certain sections of the Companies Act, 2013. Let’s see the compliance checklist for OPCs. 

ROC Compliances for One Person Companies 

Following are the mandatory OPC ROC compliances: 

• Section 173 - Board Meeting: OPC is required to hold at least one board meeting in each half of the calendar year. The gap between the two board meetings should not be less than 90 days. However, in the case of one person company having only one director, then the requirement of board meetings shall not apply.  

• Statutory Registers: An OPC is required to maintain the requisite statutory registers in compliance with the provisions of the Companies Act, 2013. 

Other ROC compliances of OPC are as follows: 

• Section 164(2) & 143(3)(g): A disclosure relating to the non-disqualification of directors in at the time of appointment shall be made in Form DIR-8. 

• Section 184 (1): Every director shall disclose his interest in other entities in the first board meeting of each financial year in Form MBP-1. 

• Rule 12A of Companies (Appointment & Qualification of Directors) Rules, 2014: Every director shall file DIR-3 KYC / DIR-3 KYC WEB for each financial year in respect to their DIN in Form DIR-3 KYC.  

• Section 405: By exercising the powers provided under Section 405, the Central Government implemented Specified Companies (Furnishing of information about the payment to micro and small enterprise suppliers) Order, 2019 whereby the company shall intimate the ROC regarding payments pending to be made to the MSME vendors on a half yearly basis in MSME Form-1. The due date for filing returns is 30th April and 31st October of each financial year. 

• Section 73 and Rule 16: Return of deposits and particulars relating to the transactions not considered as deposits shall be furnished to the ROC on or before 30th June of every year in Form DPT-3. 

• Section 139: Information regarding the appointment of the auditor of the company shall be furnished by filing Form ADT-1 within 15 days of the Annual General Meeting. 

• Section 92: Annual Return of a One Person Company shall be filed in Form MGT-7A within 60 days from the date of the annual general meeting.  Even though the AGM is not applicable for OPC, the due date for AGM shall be considered for determining the last date for Form MGT-7A. The due date for AGM is 60 days after completion of 180 days from the end of the financial year. 

From MGT-7A became applicable from FY 2020-21 onwards for One Person Companies and Small Companies. In case of default in filing the same, a penalty of Rs. 100 per day shall be levied. 

• Section 137: Audited financial statements of the company shall be furnished in Form AOC-4 along with the annual report and the director’s report within 180 days after the end of the financial year. 

Non-ROC Compliances 

Apart from the above ROC compliances, OPCs are also required to ensure compliance with other laws. This includes: 

• Income Tax: OPC shall file its income tax return and get its books of account audited by a Chartered Accountant. Apart from tax returns, the OPC shall also ensure other compliances under the Income Tax Act including TDS/TCS, advance tax, Minimum Alternate Tax (MAT), etc. 

• GST: If the OPC has undertaken GST registration, then such OPC shall file requisite GST returns on or before the due date. 

• Other Laws: If the OPC undertakes certain categories of transactions that are regulated by the provisions of other laws, then the OPC shall comply with the requirements of such other laws as well. This can include the Foreign Exchange Management Act etc. 

Major Changes for One Person Companies 

The provisions governing the One Person Companies saw some major changes effecting from 1st April 2021. These came as part of easing the compliance requirements and channeling the growth for OPC. These are summarized as under: 

• Non-Resident Indians can also form a One Person Company in India 

• As per the normal provisions, a person is considered as a resident in India if he stays in India for more than 182 days. Every company should have at least one resident director. However, in the case of One Person Company, a person who has stayed in India for 120 days or more in the preceding financial year shall be eligible for incorporating OPC in India. 

• The conversion of an OPC into a public limited company has become easier. 

• The minimum time limit of 2 years before conversion of OPC to any other company has been done away with. 

• The threshold limits for compulsory conversion of OPC have been done away with. 

• Replacement of Form MGT-7 with new Form MGT-7A beginning from Financial Year 2020-21. 

• e-Form INC-5 has been omitted while e-Form INC-6 saw major modifications (applicable for the conversion of OPC).