What are the Compliance Requirements for a One Person Private Limited Company?

Introduction

One Person Company (OPC) is a unique concept introduced under the Companies Act, 2013, to encourage individual entrepreneurs to incorporate their businesses with a corporate structure. It combines the benefits of sole proprietorship with the advantages of a private limited company. While the concept eases business operations for solo entrepreneurs, an OPC still has to adhere to various statutory compliance requirements to maintain its legal status and avoid penalties.

In this comprehensive guide, we will explore the compliance requirements applicable to a One Person Private Limited Company in India, covering legal, tax, financial, and other essential aspects.

1. Incorporation Compliance

Before understanding ongoing compliance, it's essential to know the basic requirements for incorporating an OPC:

✅ Minimum one director (can be the sole shareholder).

✅ Nominee is mandatory (to take over in case of the owner's death/incapacity).

✅ Digital Signature Certificate (DSC) and Director Identification Number (DIN).

✅ Name approval from MCA.

✅ Filing of SPICe+ forms with ROC.

✅ Issue of Certificate of Incorporation.

2. Mandatory Annual Compliance Requirements

Once incorporated, an OPC must comply with several annual obligations to ensure smooth operations and legal standing:

2.1. Filing of Annual Returns (Form MGT-7A)

• OPCs must file their annual returns in Form MGT-7A with the Registrar of Companies (ROC).

• This form provides details of shareholders, directors, and other statutory matters.

• Due Date: Within 60 days of holding the Annual General Meeting (AGM) or, for OPCs where AGM is not mandatory, within 60 days from the date of signing the financial statements.

2.2. Filing of Financial Statements (Form AOC-4)

• Financial statements, including Balance Sheet, Profit and Loss Account, and Directors' Report, must be filed using Form AOC-4.

• Due Date: Within 180 days from the end of the financial year.

2.3. Income Tax Return Filing

• OPCs are required to file income tax returns annually.

• Due Date: By 30th September (if audit applicable) or 31st July (if audit not applicable).

2.4. Conduct of Board Meetings

• At least one Board Meeting must be conducted every six months.

• The gap between the two meetings should not be less than 90 days.

2.5. Statutory Audit

• The books of accounts of an OPC must be audited by a Chartered Accountant.

• The audit report forms part of the financial statements filed with the ROC.

3. Other Important Compliance Requirements

3.1. Maintenance of Statutory Registers

OPC must maintain:

• Register of Members.

• Register of Directors.

• Register of Charges, if applicable.

• Minutes of Board Meetings.

3.2. Appointment of Auditor (Form ADT-1)

• Mandatory appointment of an auditor within 30 days of incorporation.

• Reappointment is necessary at subsequent AGMs.

3.3. Filing of MSME Returns (if applicable)

• If the OPC has outstanding dues to MSME suppliers for more than 45 days, MSME Form I must be filed.

• Filed half-yearly.

3.4. Filing of Form DIR-3 KYC

• Every director with a DIN must file DIR-3 KYC annually.

• Ensures active DIN status.

4. Taxation and Financial Compliance

4.1. GST Registration and Returns (If Applicable)

• Mandatory if turnover exceeds the prescribed limit (currently ₹40 lakhs for goods, ₹20 lakhs for services).

• Monthly/Quarterly filing of GST returns.

4.2. TDS Compliance

• If the OPC is required to deduct tax at source, timely TDS payment and return filing is mandatory.

4.3. Advance Tax Payments

• If the tax liability exceeds ₹10,000, advance tax must be paid quarterly.

5. Event-Based Compliance Requirements

Certain events trigger specific compliance requirements, such as:

Failure to comply with event-based requirements can lead to penalties and legal complications.

6. Penalties for Non-Compliance

Non-compliance with OPC statutory requirements can attract the following penalties:

• Late fees for delayed ROC filings (₹100 per day).

• Penalty on directors and company for failure to file annual returns or financials.

• Disqualification of directors.

• Striking off the company's name by ROC.

7. Advantages of Regular Compliance

• Enhances credibility and brand image.

• Smooth access to bank loans and funding.

• Avoidance of legal hassles and penalties.

• Easier business expansion.

• Facilitates seamless transfer or closure.

8. Checklist of Key Compliance for OPC

✅ Annual Return (MGT-7A).

✅ Financial Statements (AOC-4).

✅ Income Tax Returns.

✅ Appointment/Reappointment of Auditor.

✅ Board Meetings.

✅ Maintenance of Statutory Registers.

✅ GST/TDS Compliance.

✅ MSME Returns (if applicable).

✅ DIR-3 KYC.

✅ Event-Based Filings.

9. Conclusion

While the structure of a One Person Company simplifies ownership and management for solo entrepreneurs, compliance remains critical. Regular filing, maintaining statutory records, and adhering to tax obligations not only help avoid penalties but also build a foundation for sustainable business growth.

Engaging a professional Chartered Accountant or Company Secretary is highly recommended to ensure timely compliance and focus on business operations.