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One person Company Compliance Requirements


One person Company Compliance Requirements

Section 2(62) of the Companies Act defines a one-person company (OPC) as a single company with a single member. Only stockholders or subscribers to the memorandum are considered members of the company. A firm with just one stakeholder is known as an one person company.


  • The disadvantages of an OPC are as follows:Tax rate The appropriate tax slab is same since the firm is taxed in the same manner as a private company.
  • Form AOC 4 must be used to submit the financial statement to the RoC. Each director must sign the financial statement.
  • The initial auditor of the OPC must be a licensed chartered accountant.
  • Annual general meeting – A one-member company is referred to as a OPC.
    A general meeting of members cannot be held because there is only one member of the OPC.

Advantages of a one person company

The advantages of an OPC are as follows:

Safety net

The Companies Act limits a single shareholder’s liability in the firm to the unpaid subscription money registered in his or her name. This means that his or her personal property is totally protected from the business’s creditors.


In the case of the stakeholder’s demise or incapacity, the Companies Act also allows the stakeholder to select a person to assume control of the business. Also, this enables the OPC to continue existing after the departure of the founding director.

Market value

The same benefits that come with a company being listed as a private limited company are also available to OPC registration that are established under the Companies Act.

Easy credit facilities

Banks and other financial institutions favor this type of business since it is lawful and has a permanent succession provision.

Easier returns filing

While it is required for an OPC to have its accounts audited and submit the necessary annual filings, doing so is simple with the director’s signature; a company secretary’s signature is not required.

Disadvantages of a one-person company

The disadvantages of an OPC are as follows:

Tax rate

The appropriate tax slab is the same since the firm is taxed in the same manner as a private company. That would entail a 30% tax rate on all profits for an OPC. No one is exempt from this.

Need for change

Only small enterprises will be supported by an OPC. The OPC must convert to a private limited company, public limited company, or LLP if the turnover averages over Rs. 2 crore for three consecutive years.

Only one

One OPC can only be registered by a single individual, up until the OPC loses its registration. Serial business owners are sure to be impacted by this.

The registration process of a one-person company

Only two people could start a business before the Companies Act of 2013 went into effect. OPCs may be incorporated in India under the 2013 Companies Act. It controls the establishment and operation of one-person businesses in India. A one-person corporation does not require any group of individuals to be incorporated, in contrast to a public company, which requires at least two directors and two members.

Documents required for registration

A scanned replica of a current bank statement

Bank statements are available online via Internet banking or in person at a branch. Other titles that are regularly used for them are account statements and transaction summary statements.

An electricity or gas bill, a phone bill, and a mobile bill

Typically, utility expenditures include charges for power, gas, water, sewage, and garbage removal. Other services like Internet, cable television, and phone services are now viewed as standard in the majority of Indian families; however, occasionally they are seen as supplementary utilities.

Rental agreement in English transcribed in a digital format

Tenants typically receive hard copies of rental agreements. The authority must receive this scanned documentation.

A landowner’s no-objection certificate transcribed in a digital format

This letter comes from the person who owns the particular plot of property. Section 12 of the Companies Act, 2013 mandates that every corporation maintain a registered address for corporation. The registered address is submitted as an attachment to Spice+ form when a firm is incorporated in India. The Registrar of Companies (ROC) must be notified via Form INC-22 of changes to one person company registration address if the company’s address changes following incorporation.

A property or sale deeds scanned copy in English language (if the property is owned)

In real estate transactions, a sale deed is a legal document that serves as proof of the buyer’s purchase and the seller’s transfer of property ownership. The main ownership transfer documentation is this. The conveyance deed or final deed are other names for a sale deed.

Annual compliance requirements

The RoC imposes a number of one-person business compliance requirements. Now, let’s quickly describe these compliances:

Annual filing

  • Every year, every OPC is required to submit annual returns to the RoC.
  • The return must be submitted with Form MGT 7 as an attachment.
  • The yearly return must be signed by the company secretary. An OPC does not necessarily need to select a company secretary because it only has one member. The director must sign the return in this situation.

Financial statement

According to the Companies Act of 2013, financial statements that have been audited must be filed electronically.

  • Form AOC 4 must be used to submit the financial statement to the RoC.
  • Each director must sign the financial statement.
  • The statement must be submitted no later than 180 days after March 31—the end of the financial year.
  • The balance sheet, profit and loss account, audit report, and account notes should all be included in the financial statements.
  • The financial statements must be submitted within 30 days of the company’s incorporation. The initial auditor of the OPC must be a licensed chartered accountant.
  • There is no need to file Form ADT-1 for the auditor, who must serve until the first annual general meeting (AGM) of the corporation. For the appointment of the next auditor, the paperwork must be submitted, though.
  • Within 15 days of the first AGM’s conclusion, the OPC must submit Form ADT-1 to name an auditorium.
  • The auditor in question will serve in that capacity till the end of the sixth AGM.

Other compliances for a one-person company

  • The OPC must hold at least two board meetings annually, even though an OPC is not required to hold an AGM each year.
  • Annual filing requirements include income tax returns, annual reports, Form DIR-3 KYC for director KYC, and financial statements.
  • Based on its needs, each OPC is required to adhere to the tax deduction at source (TDS), goods and services tax (GST), provident fund (PF), and employees’ state insurance scheme of India (ESI) rules and regulations.
  • Form INC-20A must be submitted in order to start a business within 180 days of incorporation.
  • Within 30 days of the shares’ issuance, stamp duty on share certificates must be paid.
  • If a corporation owes MSMEs money and it has been more than 45 days since the due date, an E-form MSME-I (half-yearly return) must be filed.
  • Every year, an E-form DPT-3 (return of deposits) must be filed with information about all loans and payments that were outstanding as of the 31st of March in each fiscal year.
  • Every director of the corporation must disclose their interests on Form MBP-1 before the first board meeting or whenever there is any change.
  • Each financial year, Form DIR-8 requires a declaration that the director is not disqualified.

Annual general meeting

A one-member company is referred to as a OPC. It falls under the category of a private company yet only has one member. A general meeting of members cannot be held because there is only one member of the OPC. Section 122 of the Companies Act of 2013 contains a number of requirements relating to the general meeting in the event of an OPC. Let’s examine Section 122 and a few other clauses of the 2013 Companies Act.

Annual filings for an OPCcompliance includes the following:

  1. MBP 1
    The first board meeting of every year, or in the event that an OPC director changes, is when directors of one person businesses are required to file Form MBP-1 disclosing their ownership interests in other companies.
  2. DIR-8
    Every director must submit Form DIR-8 to one person in business compliance at the time of appointment to confirm that they are not barred or disqualified from serving as directors of a company.
  3. DIR-3 KYC
    In accordance with the Companies Regulations of 2014, directors who have an active director identification number (DIN) must submit DIR-3 KYC annually. The MCA portal will display an inactive DIN status if DIR-3 KYC is not filed. Please be aware that if DIR-3 is deactivated, no form of annual compliances for OPCs may be filed.
  4. ADT-1
    For a term of 5 years, an auditor must be appointed in a one-person corporation within 15 days of the AGM.
  5. MGT-7
    Within 60 days of the AGM, all one-person businesses are expected to submit their annual returns. You can do this by submitting MCA Form MGT-7. The penalty for not filing yearly returns is Rs 100 per day beyond the deadline.
  6. AOC-4
    OPCs are obliged to file their financial statements, including their balance sheet, profit and loss statement, and director report, using Form AOC-4 within 60 days of the AGM. A fine of Rs 100 per day is assessed for failure to submit Form AOC-4.
  7. Appointment of auditor
    Within 30 days of the company’s incorporation, the director must engage an auditor in order to comply with the OPC. An OPC is subject to a monthly fine of Rs. 300 for failing to appoint an auditor. Also, the firm won’t be permitted to open. He or she must remain in the office until the conclusion of the first AGM. For the appointment of the first auditor, Form ADT-1 is not required to be submitted.

Filing of income tax return

OPCs are required to submit Form ITR-6 to the income tax department. The 30th of September of the assessment year is the deadline for submitting Form ITR-6. If turnover, total sales, or gross receipts exceedRs. 1 crore, a tax audit is required.

Board meeting requirements

The conditions for anOPC’s board meetings are as follows:

Frequency of board meeting

If the OPC has held at least one meeting of the Board of Directors in each half of a calendar year and there is a gap of at least 90 days between sessions, the OPC is judged to have complied with Section 173. An OPC with only one director on its board will not be subject to Sections 173 and 174 (Quorum of Meeting of the Board of Directors). An AGM need not be hosted by an OPC.

Statutory audit and financial reporting

A single director must sign an OPC’s financial statement before it can be submitted to the auditor and authorized by the board. OPC is not required to include a cash flow statement in its financial statement. Within 180 days of the end of the fiscal year, a copy of such a financial statement, along with other documentation, must be filed with the RoC. In the event of an OPC, a report including explanations or comments by the board on each qualification, reservation, or critical comment or disclaimer provided by the auditor in his report is required to be included in the financial statement.

Maintenance of books of accounts

Under Section 128(5) of the Companies Act of 2013, every company is required to keep their books of accounts for at least eight financial years prior to a financial year. The essential corporate records that should be kept safe since conception are minutes and statutory records.

Preparation of financial statements

A single director must sign all of the financial statements for a one-person business. Financial statements must be approved and signed in board meetings and submitted to the RoC within 180 days after the end of each fiscal year, per Section 137(1) Third Proviso.

Other regulatory compliance

Further regulatory compliance for a one-person business includes the following:

Intellectual property rights

Copyrights, trademarks, service marks, geographical indications, patents, utility models, plant varieties, industrial designs, trade secrets, and integrated circuit layout designs are all examples of intellectual property.

It is crucial that an OPC abide by the rules governing intellectual property rights.

Non-compliance has the following repercussions for an OPC:


Many organizations’ principal concern is avoiding financial fines. The price of breaking the law can be high: the highest fine for GDPR violations to date is a staggering 746 million euros (US$847 million).


As was already established, prison sentences for breaking legal or regulatory requirements are not unheard of. A five-year prison sentence might be imposed for intentionally lying on your EEO-1 report.

A prison sentence may also result from breaking certain environmental laws and health and safety regulations.

Reputational damage

In the event that there is a compliance breach, your reputation may suffer. One of the harshest consequences of non-compliance might be reputational harm. It has wide-ranging effects, such as the devaluation of your brand, decreased earnings, trouble obtaining investment, a higher cost of capital, and the inability to attract or retain talent. The worst-case scenario for reputational damage is complete corporate failure.

How to manage compliance risk?

An OPC can manage compliance risk by taking the actions detailed below:

  1. Always begin by doing a risk assessment.
  2. Controlling compliance third parties are at the core of the risk.
  3. Recognize the most recent enforcement guidelines.
  4. Don’t forget to create an ethical and compliance culture.
  5. Encourage others to speak up.
  6. Always evaluate and revise your compliance efforts.


We hope that this blog will be interesting to all the readers who are interested in learning about the fundamentals of OPC compliance requirements. We underline the significance of following the rules as we draw to a close our discussion in this regard.

Importance of complying with the regulations

By staying in compliance, your business can reduce risks like data loss and security breaches and avoid disciplinary actions that could result in license revocation, reputational harm, lost clients, and financial penalties and losses.

Financial health

Any compliance officer will tell you that the first advantage of regulatory compliance is financial safety. The offending organization may face severe fines for failing to comply with the law.

Protection from lawsuits

In addition to avoiding financial fines, following rules and regulations shields businesses from lawsuits, whether they are initiated by the government body itself or by third parties (e.g., the public).

Business continuity and competitiveness

Many benchmarks that demonstrate what is necessary for firms to succeed in their field are provided by regulatory compliance. Laws governing compliance have also developed to promote uniformity in the marketplace and make it possible for businesses to engage in fair, moral, and level competition. Businesses that comply with regulations may do well in their respective industries.

Maintain a solid reputation

Businesses that follow rules and laws provide customers with a sense of security. They entrust these businesses with their information, cash, and loyalty in return.

Protection from cybercrime

Healthcare and financial organizations are examples of higher-risk sectors that understand the importance of the data they gather and that they are prime targets for hostile actors.

Some industries, though, occasionally believe they are not as likely to be attacked. This false belief frequently results in a narrow focus on regulatory compliance and decreased security, which raises the risk of cyberattacks and data breaches.

Increased profitability

Companies can promote themselves more effectively when they are in compliance with regulations and have audit reports to prove it. Clients can trust their providers more when they can show continuing SOX compliance and rely on SOC 1, SOC 2, and SOC 3 reports. Without these reports, the company might experience a drop.

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Kanakkupillai is dedicated to being your reliable partner in every step of your business journey. With affordable and expert assistance, our primary goal is to educate our customers i.e., you on legal requirements, ensure compliance, and support you throughout your business lifecycle.


Kanakkupillai is your reliable partner for every step of your business journey in India. We offer reasonable and expert assistance to ensure legal compliance, covering business registration, tax compliance, accounting and bookkeeping, and intellectual property protection. Let us help you navigate the complex legal and regulatory requirements so you can focus on growing your business. Contact us today to learn more.