Today, we will be focusing on a One Person Company (OPC) and talk about OPC compliance requirements. OPCs were offered under the Companies Act, 2013, for helping solo entrepreneurs run and manage a limited liability business entity. By the virtue of its design, an OPC usually has a lower turnover than a private limited company. Therefore OPC compliance requirements are lesser than those of a Private Ltd Company. Here is a quick look at some post-incorporation OPC compliance requirements.
OPC Compliance – Business Stationery
Post-registration, an OPC needs to follow these stationery-related compliances:
OPC Rubber Stamp
Ideally, you must purchase two types of rubber stamps:
- A round stamp highlighting the name of the OPC; and
- A straight stamp carrying the name of the OPC and the name & designation of the authorized signatory.
You will need these stamps for legal purposes like Board resolutions, bank accounts, cheques, etc.
OPC Letterhead, Invoices, etc.
It is mandatory for an OPC to have a letterhead with the name, CIN and registered office address printed clearly on it along with Email id, Contact no. and Website, if any. You must also ensure that these details are clear on all notices, invoices, and other official documents.
Like any other company, an OPC must paint or affix the name of the company and registered office address outside every place where it carries out its business.
OPC Compliance Requirement: Bank Account
As per new process of incorporation introduced by the Ministry, the Bank Account no. shall be created along with the incorporation of the OPC. However, after incorporation, certain required documents shall be submitted with the Bank for the operational functioning of the Account. Based on the Reserve Bank of India’s KYC norms, you will need the following documents to open the company’s bank account:
- Articles of Association of the One Person Company
- Memorandum of Association of the One Person Company
- Copies of the Certificate of Incorporation of the OPC (self-attested)
- A copy of the resolution for opening a bank account in the name of the OPC.
- PAN Card or copy of the PAN allotment letter
- Proof of identity of the Director(s)
Further, you must attest all copies with the seal of the company and signatures.
Appointment of a Statutory Auditor
An OPC must hire the statutory auditor within thirty days from its incorporation. The director of a One Person Company is responsible for appointing the auditor. The auditor must be a practicing chartered accountant with expertise in auditing all kinds of financial accounts of a company.
After the incorporation of an OPC, you must issue share certificates evidencing the ownership of the company.
OPC Compliance Requirement: Board Meetings
As per Section 173(5) of the Companies Act, 2013, an OPC must conduct a Board Meeting in each half of the calendar year. Therefore, you need to conduct at least one meeting between January to June and another between July to December, every year. Further, the gap between the two meetings should not be less than 90 days. However, if the OPC has only one director on the Board, then this requirement does not hold good. the director can simply pass a resolution and enter it in the minutes book.
Filing Financial Statements
All companies, including an OPC, must file the following financial statements with the registrar of companies within 180 days from the end of the financial year:
- Balance Sheet at the end of every financial year.
- P&L Account (profit & loss)
- Cash-flow statement (except for small and dormant companies) and other notes to accounts.
- Director’s Report along with is Annexure
- If there have been any changes in equity, then a statement detailing the change
- An explanatory note for any document, if required.
Additionally, the OPC also needs to file annual returns and income-tax returns.
An OPC has several compliance benefits as compared to a Pvt Ld Company. We hope that this article offered a clear picture of the OPC compliance requirements to help you plan better. For any further clarification, please go through the Companies act, 2013 in detail to talk to a tax and compliance advisor. Good Luck!