OPC Compliance After Incorporation in India
Introduction
Starting a One Person Company (OPC) in India is a great option for solo entrepreneurs who want the benefits of a private limited company with less compliance burden. But once the OPC is incorporated, there are certain legal and regulatory compliances that must be followed to keep the company active and penalty free. These post incorporation OPC compliances include filing of forms with the Registrar of Companies (ROC), appointing an auditor, maintaining financial records, and submitting annual returns on time. In this blog, we’ll explain all the important OPC compliances after incorporation that every entrepreneur should know to run their business smoothly and legally.
What is OPC?
A One Person Company (OPC) represents a business structure that India introduced under the Companies Act, 2013. As the name implies, a single person can form and manage an OPC, acting as both the shareholder and the director. This structure provides the benefits of a private limited company such as limited liability, a separate legal identity, and easier access to funding while requiring fewer compliance efforts. Solo entrepreneurs who want to run a business without partners but still enjoy corporate advantages often choose OPC.
Mandatory OPC Compliances after Incorporation
1. Appointment of Auditor
Every OPC must appoint a Chartered Accountant as its auditor within 30 days from incorporation by filing Form ADT-1. The auditor will audit the company’s financial records. This is a mandatory requirement under the Companies Act, 2013.
2. Maintenance of Statutory Registers
OPC must maintain statutory registers such as Register of Members and Register of Charges. These records should be kept at the registered office. It ensures legal compliance and transparency in operations.
3. Holding Board Meeting
An OPC must hold at least one board meeting in each half of the calendar year. The gap between the two meetings should not be less than 90 days. If there’s only one director, no board meeting is required.
4. Filing of Annual Return
The OPC must file its annual return in Form MGT-7A with the Registrar of Companies within 60 days from the date of the Annual General Meeting or the due date. The company includes its basic details and compliance summary in the return.
5. Filing of Financial Statements
OPC must file its financial statements in Form AOC-4 within 180 days from the end of the financial year. It includes the balance sheet, profit and loss statement, and auditor’s report. Filing ensures financial transparency and compliance.
6. Income Tax Return Filing
OPC must file its income tax return every year using ITR-6 form. The due date is 31st October if audit is applicable, or 31st July otherwise. Timely filing helps avoid penalties and interest.
7. Maintenance of Books of Accounts
The OPC must maintain proper books of accounts on an accrual basis and follow the double entry system. These records should reflect all financial transactions and be kept at the registered office. This practice ensures audit readiness and compliance.
8. Director’s Report Preparation
The Director of the OPC must prepare a report covering financial performance, compliance status, and other prescribed matters. This report should be attached with the financial statements. It is a part of annual filing and ensures regulatory adherence.
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Annual Compliance for OPC
1. Form MGT-7A
One Person Companies and small companies use Form MGT-7A to file their annual return. They must submit it within 60 days of the AGM due date, even if they don’t hold the AGM. This form provides key company details such as the shareholding pattern, director information, and compliance status. By filing MGT-7A, companies maintain good standing with the Ministry of Corporate Affairs (MCA).
2. Form AOC-4
An OPC files its audited financial statements with the Registrar of Companies using Form AOC-4. The form includes critical financial documents such as the balance sheet, profit and loss account, notes to accounts, and the auditor’s report. The OPC must submit the form within 180 days from the end of the financial year. Filing AOC-4 on time demonstrates transparency and compliance with financial reporting requirements.
3. Income Tax Return
An OPC is required to file its Income Tax Return annually using Form ITR-6. This filing includes details of income, expenses, tax computation, and other financial disclosures. The due date for filing is 31st October if the OPC is subject to audit. Filing ITR is a legal obligation and helps avoid penalties and scrutiny from the Income Tax Department.
4. DIR-3 KYC
DIR-3 KYC is a mandatory compliance for every director of an OPC to update their personal and contact details with the MCA. It must be filed annually before 30th September. Non-compliance may result in the deactivation of the Director Identification Number (DIN), restricting the director from performing company-related functions. This filing ensures that director records remain current and accurate in government databases.
5. MSME Form I (if applicable)
An OPC must file MSME Form I if it owes outstanding payments to Micro or Small Enterprises for more than 45 days. The company files this form twice a year once in April for the October–March period, and once in October for the April – September period. This process promotes accountability and ensures timely payment to MSME suppliers. If applicable, the MSME Development Act, 2006, makes this filing mandatory.
Event-Based Compliances of One Person Company
- Change in Registered Office: File Form INC-22 within 15 days of changing the registered office address. It ensures that the ROC has updated location details of your OPC.
- Change in Director or KMP: You must file Form DIR-12 within 30 days of appointing or resigning a Director or KMP to keep your company’s leadership records accurate and compliant.
- Increase in Authorized Share Capital: File Form SH-7 to increase authorized capital before issuing more shares. You must submit it within 30 days of passing the resolution.
- Allotment of Shares: The company files Form PAS-3 within 15 days of share allotment to report new share issuance. It helps update the company’s shareholding with the ROC.
- Change in Name of OPC: You file Form INC-24 after obtaining name approval to legally change the company’s name. You must support it with a board resolution and the altered MOA.
Additional Compliances of OPC
1. Maintenance of Minutes Book
Each OPC must maintain a minutes book to record the proceedings of board meetings and key company resolutions. Even if only one director manages the OPC, they must still document written decisions. These records serve as legal proof of the company’s decisions. Maintaining them properly ensures transparency and supports compliance during regulatory inspections.
2. Maintenance of Financial and Statutory Records
An OPC must maintain proper books of accounts, statutory registers, and other financial records at its registered office. These include the register of members, share certificates, financial statements, and compliance related documents. These records are essential during audits and help ensure compliance with the Companies Act, 2013. Failure to maintain them can lead to penalties and legal complications.
3. GST Return Filing (if registered)
If the OPC is registered under GST, it must file monthly or quarterly GST returns like GSTR-1 and GSTR-3B. These returns declare outward and inward supplies, input tax credit, and tax liabilities. Timely filing avoids interest, penalties, and cancellation of GST registration. It’s crucial for maintaining tax compliance and smooth business operations.
4. TDS Return Filing (if applicable)
When an OPC deducts Tax Deducted at Source (TDS), it must file quarterly TDS returns such as Form 26Q. These returns reflect the amount of TDS deducted and deposited against payments like salaries, rent, or professional fees. Timely filing ensures deductees get credit for TDS in their income tax filings and helps the company avoid notices and penalties.
Consequences for Non-compliance of OPC
- A penalty of ₹100 per day per form is levied for late filing.
- The director may face disqualification after three consecutive years of non-filing.
- Additional government fees apply along with the regular filing fee.
- The company’s credibility and legal standing can adversely affect them.
- The ROC may initiate legal action or prosecution.
- The ROC may strike off the OPC for prolonged non compliance.
Conclusion
Complying with the mandatory, annual, event based, and additional requirements after OPC incorporation is essential to ensure smooth business operations and avoid legal trouble. While an OPC enjoys relaxed compliance compared to other companies, it is still bound by several regulatory filings and record keeping obligations. Staying updated with due dates, maintaining accurate records, and timely filing of forms helps preserve the company’s good standing with authorities. Regular compliance not only prevents penalties but also builds trust with stakeholders and ensures long term business sustainability.
Suggested Read :
OPC Turnover Limit for Small Businesses
Benefits of One Person Company
FAQ
1. Is it mandatory to appoint an auditor for an OPC?
Yes, Appointing a Chartered Accountant as an auditor within 30 days of incorporation is mandatory for every OPC.
2. Does an OPC need to hold an AGM (Annual General Meeting)?
No, OPCs are exempt from holding AGMs, but they must still file annual returns like MGT-7A within the due date.
3. What happens if an OPC fails to file annual returns on time?
Delay in filing attracts a penalty of ₹100 per day per form and may lead to further legal consequences.
4. Can an OPC be converted into a Private Limited Company?
Yes, an OPC can be converted into a private or public company by filling Form INC-6 with the necessary approvals.
5. Are GST and TDS filings required for every OPC?
GST and TDS filings are only required if the OPC is registered under GST or is liable to deduct TDS as per income tax provisions.
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