What is One Person Company Annual Compliance Checklist?

Ashish M. Shaji

13 Sep, 2022

In case of late filing or non-filing of Annual ROC Return before the due date or the last date will attract a penalty 12 times of normal fees. Further, the Company can’t be wound-up or closed without the filing of the return. Therefore, it is good to file the Annual Return on the due dates.  In this article, we will discuss One Person Company Annual Compliance. As we know One Person Company Registration is easy as compared to Private Limited Company Registration.

What is One Person Company as per Companies Act, 2013?

Section 2 (62) of the Companies Act, 2013 says a company with only one person as its member or sole owner falls under the criteria of One Person Company or OPC. Further, an OPC is owned and administered by one person only. Moreover, all the members of an OPC are the followers to its memorandum of association (MOA) or its shareholders.

Further, it is significant to mention that an OPC can only be incorporated as a Private Company which means that all the provisions applicable to a Private Limited Company will be applicable to a One Person Company.

Who cannot form a One Person Company?

The following can’t form such a company:

• Minor;
• Foreign Citizen;
• Non-resident;
• A person incapacitated by contract.

One Person Company Annual Compliance

Other Compliances-

Directors’ Report- Director shall contain details of information required for small companies.

Circulation of Financial Statement & other relevant Documents– Company shall send to the Members of the Company approved Financial Statement, Directors ‘Report and Auditors’ Report at least 21 clear days before the date of AGM.

Statutory Register- Company shall maintain mandatory registers: Director register, director shareholding register and related party transaction register.

One Person Company Annual Compliance: Compliance with the Companies Act, 2013

Section 173(5) of the Companies Act, 2013 requires that a One Person Company must conduct at least one board meeting (BM) in each half of the calendar year. This simply means that one meeting is obligatory 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. However, if in case the company has only one director then in that case such meeting requirement does not arise at all.

Further, an OPC is mandated to hold its Annual General Meeting (AGM) as provided under section 139 (1) of the Companies Act, 2013 to appoint a Statutory Auditor. Furthermore, such an auditor must hold the office from the conclusion of the first AGM (Annual General Meeting) to the conclusion of the sixth Annual General Meeting.

Mandatory Compliance for the OPC Registration

Following are the compliances which are mandatorily required to be followed for OPC Registration –

• Conducting minimum two board meetings as stated under the provisions of the Companies Act, 2013^[1];
• Statutory audit of the financial statements by a practising chartered accountant;
• Appointment of an Auditor;
• Filing of Income Tax Return (ITR);
• Annual filings to the ROC (Registrar of Companies);
• Keeping up of the statutory registers;
• Form AOC-4 for the financial statement;
• MGT-7 for an annual return.

Event Based Compliances for a One Person Company

Following listed are the compliances which occur on happening of a certain event –

• Receipt of the share application money
• Allotment of shares
• Transfer of shares
• Appointment or resignation of the directors
• Appointment of the Managing Director or a Whole Time Director (WTD)
• Execution of the agreement with the Related Parties
• Change in the Bank Signatories
• Change in the Statutory Auditor

Conclusion

OPC Registration is easy and costs effective in terms of favoured compliance. AGM in One Person Company can be passed by just entering details in minutes’ books. In the case of OPC, there is no need to hold physical AGM, because there is only one Member. One should always comply with the One Person Company Annual Compliance and in case of any doubt seek the help of a professional.

Read our article:Advantages of One Person Company over other Company Types