One-Person Company: Annual Filing Compliance with FAQs

Various newer concepts have been initiated in the law and alteration has come across to run the companies in India in 2014 within the Companies Act 2013. One of them is the One person company in India (OPC).

The One Person Company section refers to a company with only one person or member. This can be better understood through the aspects mentioned below.

What is One Person Company (OPC)?

As per the Companies Act, 2013, the One Person Company (OPC) amendment has been introduced which states that a private company must require 2 directors and members while there must be 3 directors and 7 members in the public company. It also mentions that a single person is now not eligible to incorporate a company.

While section 2(62) in the Companies Act 2013 only 1 director and 1 member can start a company but with lesser compliance.

In the one-person company rule, the change is done by the Ministry of Corporate Affairs (MCA). It is done to provide advantages to Start-ups & Innovators in the country, and to those who are providing products and services on e-commerce platforms and to obtain many more unincorporated businesses towards the organized sector the start of One Person Companies (OPCs) is boosting the firm’s rules to permit the OPCs to grow excluding any limitations on the paid-up capital and turnover, permitting their conversion to other classified firms during any time, lowering the residency limit for an Indian citizen to settle an OPC from 182 days to 120 days and indeed permit the Non-Resident Indians (NRIs) to incorporate OPCs in India.

Furthermore, the fast-track procedure for mergers beneath the Companies Acts 2013 will be prolonged to also involve the mergers of Startups with other startups and with Small companies reason being that the procedure of the same gets finished at a faster rate for these firms.

The changes to the rules governing OPCs will include the mentioned date of 1/04/2021.

• In earlier times, NRIs were not permitted to start OPCs. now the common person who is an Indian citizen whether residing in India or not will be permitted to form an OPC.
• For said to be an Indian citizen the proposed period of residency is lowered to 120 days from 182 days for NRIs.
• The rule relating to voluntary conversion unless OPC has ended 2 years from the start date of the incorporation is urged to be omitted and is imposed from April 1, 2021, conversion of one person company into a public company or a private or public firm instead of the firm enrolled beneath section 8 of the act, post raising the minimum number of members and directors to 2 or min of seven members and 3 directors.
• The limit of the paid-up capital and the turnover presently applied for OPCs (paid-up share capital for Rs 50,00,000 and an average turnover while the respective period of 2 cr rupees) is being done away with so that there are no restrictions on the growth of OPCs in terms of their paid-up capital & turnover.
• Rationalization of e-forms applied towards OPCs by refusing through e-Form No.INC-5 and modification of e-form INC-6 (appeal for conversion from OPC to a Private company or a Public company and Private company to OPC).

Annual Filing Forms with Due Date for OPC (One Person Company)

Form AOC-4: Within 180 days from the closure of the FY that is 27th Sept for each year.

MGT-7A Form: Within 60 days from the entry date of resolution i.e. signing provided by the member to opt for the financial statements in the minute’s book. [deemed date of AGM as per section 122(3)]

Form ADT-1: Towards the case in which appointment of the auditor is there in the ordinary case after that form will be furnished 15 days from the entry date of resolution that is signing given through the member to appoint the auditor inside the minute’s book [deemed date of AGM as per section 122(3)]

KYC of DIR-3: 30th September of each year

Note: In no case, the last date of furnishing the form

• MGT 7A will be delayed until 26th November
• ADT-1 will be delayed until 12th October

being OPC which is bound to file the form AOC-4 within the stipulated period of 180 days from the end of the financial year which is the 27th of September which shows the member is required to get the financial statements on or earlier than the 27th of September, i.e. the date of taken from the deemed date of AGM as per the provisions of section 122(3).

Note: Under the provisions of conducting the AGM is not subject to OPCs this is to remember that prolonging the last date to conduct the AGM shall not be applicable towards OPCs and yearly filing has to be implemented as per the normal provisions.

Steps to Registration One Person Company (OPC)

• Step 1: Apply for DSC
• Step 2: Apply for DIN (Director Identification Number)
• Step 3: Name Approval Application
• Step 4: Documents Required
• Step 5: Filing Forms with MCA
• Step 6: Issue of certificate of Incorporation

The Common Errors to Avoid the AGM for OPC

Here we have specified the common mistakes to prevent when preserving an AGM for OPC to ensure effective compliance and avert outcomes.

Improper Records of AGM Proceedings

An additional mistake performed often is the inability to maintain precise and comprehensive information on the AGM complaints. It comprises the minutes of the meeting, exceeded resolutions, and the attendance sign-in. These records are significant not just for destiny reference but for the matter of audits or prison disputes.

Incomplete AGM within the Stated Time

Not following the felony closing date for including the assembly is one of the most commonplace errors whilst organizing an AGM for OPC. The OPCs as per the Companies Act, 2013, are mandated to carry their AGM within 180 days from the top of the fiscal year.

Missing a Special Resolution Provision

A new decision needed to be overtaken by the selections in an OPC at a certain point in the AGM with the amendments inside the business enterprise’s articles of affiliation or the appointment of auditors. Presuming that normal resolutions will suffice for all decisions is a common mistake.

Non-Filing the AGM Resolutions with the Registrar of Companies (RoC)

It is essential to document the resolutions passed in the assembly with the Registrar of Companies (RoC) post undertaking the AGM. Many owners of OPC do not file this, presuming that it is not obligatory, however, it is a statutory need.

Not Giving Fair Notice to Shareholders

OPCs have one shareholder, so getting an AGM formal note is crucial at present. A normal mistake made isn’t always sending out the awareness inside the needed time duration (as a minimum, 21 clear days before the meeting).

Auditor Appointment Failure

OPCs do not statutory need to have an AGM till they proceed to a specific limit it is significant to appoint an auditor. Incorrectly certain OPC proprietors accept as true that they do not want an auditor when they are small corporations however this is a demand as per the Companies Act.

Ignoring the Financial Statement Approval

The Annual General Meeting (AGM) for OPC is also the time when the financial statements for the year must be approved. A common mistake is failing to review or present the financial statements thoroughly before the AGM. This oversight can lead to delays or errors in the approval process.

Wrong Filing of Financial Statements

OPCs must file their financial statements with the RoC after the AGM. A common error is submitting incomplete or incorrect financial statements, which may lead to consequences or rejection of the filing.

General Queries for One Person Company (OPC)