The concept of an OPC allows a single person to run a company with limited liability. If you are thinking about incorporating one, keep reading to learn about its various benefits and compliance requirements.
A One-person Company (OPC) is a firm incorporated by a single person. As per Section 2(62) of the Company’s Act of 2013, such a company can be formed with just 1 Director and 1 member. The OPC structure was introduced to allow a sole entrepreneur to start and manage a legal entity with limited liability. It was brought into existence mainly to help all those sole-member enterprises.
Compliance Requirements for an OPC
Corporate stationery: After the registration, it is advisable for one to purchase the following stationery
Name board: All companies, including an OPC, are required to place the name of the company outside their place/location of work.
Company rubber stamp: A rubber stamp is required for the execution of various legal documents related to banking functions, board resolutions, etc. A round-shaped rubber stamp and a straight rubber stamp bearing the name of the company and its director should be purchased.
Letterhead: The name of the company and its address must be printed on all documents that go out from the OPC on the letterheads of all invoices, notices, circulars, and other official documents.
OPC PAN Application
The foremost step after the OPC is incorporated is to get its PAN number. The application must be duly signed by the director of the OPC and submitted to the NSDL office. Along with the PAN application, a self-attested copy of the incorporation certificate must be submitted as well. This entire process of obtaining a PAN card can take around 15 days starting from the date of receipt of application.
Opening of Bank Account
The process of opening a bank account for your OPC is fairly straightforward. Since it is a corporate entity recognised by the Companies Act, 2013. No additional tax forms and registrations are required. According to RBI’s KYC regulations, the following documents are required for opening a bank account:
- Self-attested copies of the OPC’s incorporation certificate
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- A resolution to open a bank account in the name of the OPC
- A copy of the PAN allotment letter
- ID proof of the director
- Telephone bill
It is imperative to note that all documents mentioned above are to be self-attested with the OPC seal and the director’s signature.
Auditor’s Appointment
Within 30 days of incorporation of the company, the first auditor must be appointed for auditing the financial documents and statements of the OPC. Since the statutory audit is mandatory to be conducted for an OPC. An OPC must also appoint a statutory auditor to be appointed for 5 years via form ADT-1 within 15 days of the first Annual General Meeting (AGM).
Annual Meeting
Unlike all other companies, an One Person Company need not have a general meeting annually. Moreover, provisions related to the quorum for meetings do not apply to an OPC. Since the board of directors has just one person, a resolution passed by the director is acceptable and can be entered into the minute’s book. This resolution once signed by the sole director is considered the general meeting of the firm.
However, it is important to remember that, as per Section 173 of the Act, at least one meeting of the board of directors should be held in each half of the calendar year and the gap between two meetings shall not be less than 90 days.
Annual Filing for OPC (MGT-7)
The OPC’s annual returns filing shall be filed with the Registrar of Companies (ROC). The return should be filed with the ROC as an attachment to Form MGT-7. Additionally, such an annual return has to be signed by the company secretary. Where there is no company secretary available, the director has to sign the return. It must be filed by all the OPC’s registered in India every year.
Documents Required for Form MGT-7
- CIN/PAN
- List of main business activities
- Details of shares and shareholding
- List of debentures and loans
- Details of other securities held by the company
Financial Documents Required (AOC-4)
All companies, including OPC’s, are required to submit the following audited documents must be filed within 180 days from 31 March of the financial year with the Registrar of Companies (ROC):
- Balance sheet
- Accounts of profits and losses
- Audit report
- Records of any change in equity
- Any document that needs an explanatory note.
In the case of an OPC, the need for a cash flow statement is optional and not mandatory.
The Takeaway
Running a one-man show is hard enough, keeping up with compliance is another burden. Now Vakilsearch is here to help you out. Just keep in touch with our team today to ensure the smooth handling of all your compliance formalities and requirements.
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