OPC Annual Filing Archives

Can an OPC Change its Financial Year For Annual Return Filing? Introduction The Companies Act, 2013, requires One Person Companies (OPCs) in India to follow the financial year from April 1 to March 31. However, business owners often ask if OPCs can change their financial year for annual return filing, especially when linked to foreign companies or unique business needs. This blog explains when and how OPCs can legally change their financial year to stay compliant and file returns smoothly. Summery Standard Rule: OPCs in India must follow the financial year from 1st April to 31st March. Change Allowed: OPCs can change their financial year only with NCLT approval. Valid Reason Needed: Change is allowed mainly to align with a foreign parent company's financial year. Legal Process: Requires application to NCLT, supporting documents, and filing the order with ROC. Compliance Impact: Affects return filings, audit schedules, and tax timelines requires careful planning. What is a Financial Year for OPCs? For a One Person Company (OPC), the financial year is the same as prescribed for all companies under the Companies Act, 2013, which is from 1st April to 31st March of the following year. This period is used to prepare financial statements, conduct audits, and file annual returns like Form AOC-4 and Form MGT-7A. An OPC must adhere to this timeline unless it obtains approval from the National Company Law Tribunal (NCLT) to change its financial year; usually allowed only in special cases, such as aligning with the financial year of a foreign holding or parent company. Can OPCs change Their Financial year? Yes, a One Person Company (OPC) can change its financial year, but only in special cases and with approval from the National Company Law Tribunal (NCLT). Normally, all companies in India, including OPCs, must follow the standard financial year from April 1 to March 31, as per the Companies Act, 2013. However, if an OPC is a subsidiary or holding company of a foreign company, it can apply to align its financial year with that of its parent company. To do this, the OPC must submit an application to the NCLT, explaining the reason for the change and providing documents like a board resolution and proof of foreign connection. Authorities do not grant this approval easily; you must justify it, usually for reasons like consolidating financial statements with the overseas parent company. OPCs cannot request a change merely for convenience or to delay compliance. Also, many legal and tax requirements change when you change the financial year, so you should do it carefully and with legal help. We provide reliable Company Annual Filing and OPC Annual Compliances services, ensuring timely and accurate legal submissions to keep your business fully compliant. Process to change The Financial year for an OPC Step 1: Identify a Valid Reason for Change Before initiating the process, the OPC must provide a legitimate reason to request a change in its financial year. The law generally permits this only if a foreign company holds or controls the OPC as a subsidiary or holding company, and the OPC needs to align its financial year with that of the parent company. The law does not allow arbitrary changes made for convenience or to delay statutory compliance. Step 2: Prepare a Board Resolution or Sole Member Consent Since an OPC has only one member, it does not hold a traditional board meeting. However, a formal written resolution or consent from the sole member should be drafted, stating the intention and reason to change the financial year. This document forms a part of the supporting evidence for the NCLT application. Step 3: Draft and File an Application with NCLT The OPC must prepare an application under Section 2(41) of the Companies Act, 2013, and submit it to the jurisdictional National Company Law Tribunal (NCLT). The application should include details of the company, the reason for the change, foreign holding proof (if applicable), the consent document, and any other required supporting papers. Step 4: Attend NCLT Hearing (If Applicable) After filing, the NCLT may schedule a hearing to review the application and seek further clarification if necessary. The company or its authorized representative must attend and present the case. If the tribunal is satisfied, it will proceed with approval; otherwise, it may request additional information. Step 5: Receive NCLT Order Once the application is approved, the NCLT issues a formal order allowing the change in financial year. This order is an important document and serves as official approval to proceed with updating statutory records and compliance frameworks based on the new financial year. Step 6: File the NCLT Order with ROC The OPC must file the NCLT order with the Registrar of Companies (ROC) using Form INC-28 within the prescribed time. This step ensures that the ROC receives information about the financial year change and updates the company’s master data accordingly. Step 7: Update Books of Accounts and Statutory Records After obtaining approval, the OPC should update its books of accounts, accounting software, and statutory registers to reflect the revised financial year. It’s also important to notify internal stakeholders, tax consultants, and auditors about the change to ensure alignment in future filings. Step 8: Align Annual Return Filing and Compliance Dates With the new financial year in place, the company must prepare all future annual filings, such as Form AOC-4 and Form MGT-7A, based on the updated dates. The company must also realign compliance timelines, audit schedules, and internal reporting accordingly to avoid penalties or missed deadlines. How does it impact Annual Return Filing? When the financial year is changed, the due dates for filing forms like AOC-4 and MGT-7A also change. These forms must now be submitted based on the new financial year-end. The company will need to adjust its compliance schedule, including audit timelines, board meeting records, and return filings to match the new period. All accounting records and financial data must be updated to reflect the revised financial year. This may require careful adjustments in bookkeeping. The statutory auditor must be informed about the change so that the audit process can be planned as per the new financial year. There could also be an impact on tax filings and other financial reports, especially if the change in the financial year overlaps two tax periods. If the company fails to file returns based on the new financial year, it may lead to penalties or non-compliance issues, so proper planning is essential. Conclusion An OPC can legally change its financial year, but only under special circumstances and with approval from the NCLT. The company must provide strong justification for this decision, especially if it is affiliated with foreign entities. Because the change impacts multiple aspects of compliance and return filing, the company should carefully plan and execute it under expert guidance to avoid penalties or delays. Suggested Read : Financial Statements for OPC Annual Filing Role of Nominee in OPC AGM Provisions for OPC Form MGT 7A for OPC Mandatory Compliance List for OPC FAQ No, an OPC cannot change its financial year without prior approval from the National Company Law Tribunal (NCLT), as required under Section 2(41) of the Companies Act, 2013. Change is typically allowed when the OPC is a subsidiary or holding company of a foreign entity and needs to align its financial year with the parent company for consolidation purposes. The time varies depending on the NCLT's schedule, but typically it may take a few weeks to a couple of months, including time for hearings and documentation. Form INC-28 is used to file the NCLT order with the Registrar of Companies (ROC) once approval is granted. Failure to update filings and comply with new timelines can lead to penalties, late fees, and legal non-compliance under the Companies Act, 2013.

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