OPC RoC Compliance

A private limited company requires a minimum of two directors and two members, whereas a public limited company requires at least three directors and seven members. But what about an individual who wants to start a company? The Companies Act, 2013 has provisions for such individuals to incorporate a One Person Company (OPC).

An OPC is a company incorporated by a single person, requiring only one director and one shareholder, who can be the same individual. The compliance requirements for OPCs are generally less stringent compared to private and public limited companies, with certain relaxations under the Companies Act, 2013. Below is the compliance checklist for OPCs:

ROC Compliances for One Person Companies

The mandatory ROC compliances for OPCs include:

Section 173 – Board Meeting: An OPC must hold at least one board meeting in each half of the calendar year, with a minimum gap of 90 days between meetings. However, if the OPC has only one director, this requirement does not apply.

Statutory Registers: OPCs must maintain statutory registers as per the provisions of the Companies Act, 2013.

Additional ROC compliances for OPCs include:

Section 164(2) & 143(3)(g): Directors must disclose their non-disqualification status at the time of appointment using Form DIR-8.

Section 184 (1): Directors must disclose their interests in other entities at the first board meeting of each financial year using Form MBP-1.

Rule 12A of Companies (Appointment & Qualification of Directors) Rules, 2014: Directors must file DIR-3 KYC / DIR-3 KYC WEB annually in respect of their DIN using Form DIR-3 KYC.

Section 405: The Central Government requires companies to report payments pending to MSME vendors biannually in MSME Form-1, due on 30th April and 31st October each financial year.

Section 73 and Rule 16: Companies must report deposits and transactions not considered deposits annually by 30th June using Form DPT-3.

Section 139: Information regarding the appointment of the company auditor must be filed within 15 days of the AGM using Form ADT-1.

Section 92: The Annual Return of an OPC must be filed within 60 days from the AGM using Form MGT-7A. Even though AGMs are not applicable to OPCs, the due date for AGMs (60 days after 180 days from the end of the financial year) determines the deadline for Form MGT-7A. A penalty of Rs. 100 per day is levied for defaults in filing.

Section 137: Audited financial statements must be filed annually within 180 days from the financial year-end using Form AOC-4, along with the annual report and directors’ report.

Non-ROC Compliances

In addition to ROC compliances, OPCs must comply with other laws, including:

Income Tax: OPCs must file income tax returns and have their accounts audited by a Chartered Accountant. Compliance with other Income Tax Act provisions such as TDS/TCS, advance tax, and Minimum Alternate Tax (MAT) is also required.

GST: If registered for GST, OPCs must file GST returns by the due dates.

Other Laws: Compliance with other applicable laws, such as the Foreign Exchange Management Act, is mandatory for OPCs undertaking specific transactions.

Major Changes for One Person Companies

Effective from 1st April 2021, several changes were made to ease compliance and support OPC growth:

• NRIs Forming OPCs: Non-Resident Indians can now form OPCs in India. A person who has stayed in India for 120 days or more in the preceding financial year qualifies to incorporate an OPC.
• Conversion to Public Limited Company: The two-year minimum period before converting an OPC to another company type has been removed.
• Threshold Limits: The compulsory conversion thresholds for OPCs have been eliminated.
• Form MGT-7A: Form MGT-7 was replaced with Form MGT-7A starting from the Financial Year 2020-21.
• Modifications in e-Form INC-6: e-Form INC-5 was omitted, and significant modifications were made to e-Form INC-6 for OPC conversions.