Roles of a Chartered Accountant in One Person Company Registration in Chennai
When developing strategies, asking for business loans, keeping accounts, installing software, applying for grants or subsidies, etc., a chartered accountant’s (CA) knowledge in key business-related areas, including laws, finance and taxes, agreements, and so on, might be crucial.
Therefore, speaking with a CA while developing a one-person company (OPC) can be extremely helpful because it allows one to gain clarity on key issues up front rather than getting caught in a trap later.
A CA can simply explain the various governing rules, compliances, and tax regulations that apply to company registration in Chennai so that you can decide what will be the best course of action for your company.
In light of the aforementioned, we go into further detail in this blog article on the roles of a CA in the registration of an OPC in Chennai for the benefit of interested readers.
Explanation of an OPC
A type of business created under the 2013 Companies Act is an OPC. A single business person can start and run a limited liability company thanks to this type of business structure. The one person company establishment’s primary goal is to promote individual businesses.
An OPC is a company with just one member, according to Section 2(62) of the Companies Act. Additionally, shareholders or subscribers to a company’s memorandum of association (MOA) are all that a company’s members are. In essence, an OPC is a corporation with just one shareholder on the payroll.
Importance of a CA in OPC registration
A CA assists you in trademarking your goods
A CA knows the technicalities and the method involved in trademarking your unique product with the needed authority. Even before the company is registered, one can obtain the trademark.
Assists you in applying for an overdraft or business loan
Your chances of receiving a loan increase when you are aware that a CA is behind your documents and loan application. Additionally, they will be able to address any inquiries from your bank regarding budgeted income and expenses.
Aids in the submission of ROCs
The Company’s Act of 1956 mandates that every corporation submit its annual accounts and annual returns within a specific time limit. When you concentrate on making the crucial company decisions, a CA can simply handle the numerous forms and facts that must be included when ROC filing in Chennai.
A CA’s responsibilities in OPC registration
The certificates required for company registration procedures are approved by CAs. A CA’s involvement is therefore essential throughout the registration procedure.
The following is a list of a CA’s key responsibilities in this regard:
1. Approval of DIN
A person cannot be appointed or reappointed as a director by the OPC unless the individual has been given a director identification number, or DIN, by the government. A company must deliver all required paperwork to the CA prior to registration. To authorize someone to sign on your behalf, you must then provide an affidavit. The CA will then digitally sign the paper and immediately provide the DIN online. As a result, it is difficult to obtain the DIN without the CA’s consent.
2. Name approval process
A CA can assist you with locating the company name in accordance with the rules outlined in the Companies Act.
The ROC office must approve the name approval process within five business days. But first, the chosen name must receive the CA’s blessing.
3. Drafting of MOA and AOA before company registration
The MOA and articles of association (AOA) documents are written by a CA in accordance with the companies act.
The MOA document will contain information such as the company name, the location of the registered office, the items required for business operations or the items for which the company is applying for registration, the liability of the involved members, and the share capital.
4. Approval of INC7, INC 22, and DIR12
Following the approval of the MOA and AOA documents, the INC7, INC22, and DIR12 documents are examined. Once more, the CA must approve these documents and confirm the information provided in the forms.
Planning and preparation
The idea that CAs are only necessary until your firm is fully established is untrue. Even before you have launched your business, you might enlist the assistance of a seasoned CA. In addition to many other things, he can assist you with marketing plans, salary increases, tax-saving investments, and company model evaluation.
Assessing eligibility for OPC registration
A CA is the ideal candidate to evaluate the requirements for OPC registration due to their knowledge and practical training.
Advising on business structure and compliance requirements
A competent and experienced CA can assist you with more than simply tax return preparation.
Employers can begin with one or two employees when they first launch a business. To make sure you adhere to all taxation regulations, including labor laws, tax deduction at source (TDS), and salary provisions, you must engage a CA for these one or two employees.
Your startup will develop over time, which means it will deal with more complicated issues including corporate processes and tax matters. To handle all such difficulties by providing practical solutions, it makes sense to hire a CA online.
Although individual accountants may also provide you with a range of services, a CA will be able to advise businesseson sound opportunities due to their expertise and practical training. He can assist you in developing workable business ideas so you may seize the chance and advance.
Preparation of documents and forms
A CA is in the best position to create all the paperwork needed for an OPC’s pre- and post-registration phases.
In fact, the registration process for an OPC cannot be successfully finished without a CA’s attestation of the documents that must be submitted during the registration process.
Filing and registration
Verification and filing of documents with the ROC
A CA aids with document verification and submission to the ROC. The following is a list of such documents:
- List of directors
- Consent of the directors
- Statutory declaration
- Notices of the address of the registered office
- A letter of authority for making necessary corrections in memorandum and articles
Incorporation certificate and PAN/TAN application
A CA assists you in submitting a standard application form to the Ministry of Corporate Affairs (MCA) in order to apply for incorporation, assign a permanent account number (PAN), and assign a tax deduction and collection account number (TAN).
Both the PAN and the TAN are mentioned in the certificate of incorporation (COI) that was granted by the MCA.
Bank account opening and other post-registration formalities
You can open a bank account with any private bank when OPC is incorporated.
While cash payments and receipts may not be allowed for determining your taxable business income under the Income Tax Act of 1961, this is the first and most important thing you need to do after receiving a COI from the government.
By taking the following actions, a CA can assist you in opening a start-up business account:
- On the website of the chosen bank, submit an online application for a new business account.
- If the online application is unsuccessful, you can apply at a bank location instead.
- Gather the “know your customer (KYC)” documentation necessary to open the account.
- The bank will complete the necessary account opening procedures and open the new business account.
Ensuring compliance with statutory and regulatory requirements
The following post-incorporation OPC compliance obligations can be assisted by a CA:
Advice on the design of the name board, the kind of the company’s rubber stamp and letterhead, how to get an OPC PAN card, how to choose an auditor, and how to run an OPC annual general meeting are all examples of things you might receive.
Preparation and filing of financial statements and tax returns
The following financial statements must be prepared and filed with the ROC by all businesses:
- Balance sheet as at the end of the financial year;
- Profit and loss account;
- Cash flow statement for the financial year;
- Statement of changes in equity, if applicable; and
- Explanatory note forming part of any document.
You will receive assistance from a CA in creating and submitting the earlier specified financial statements to the ROC.
If you are registered under the taxable regime, the government will urge you to keep proper records of all commercial transactions in addition to your registration documents.
You need a CA in this situation because they are the ones who are fully knowledgeable about the regulatory standards for taxes. Maintain accurate accounting records since they will provide you with all the information you need to understand the past, present, and future state of your company.
You can use CAs to aid in the creation of prior analyses. If you have a customized accounting system, it will be more advantageous to know what happened last month or last week. This makes it simple to run into problems and address them before it’s too late.
Spotting and resolving business issues early on is the only indication of a good businessman. It’s part of the business to borrow the articles and pay for them after a month or a few weeks, but if you can’t see the threat coming, that might get you into huge difficulty. As a result,accounting management is essential.
Advisory on tax planning and optimization
A CAs duty in tax planning is to examine their client’s financial condition and find viable tax-saving possibilities. They can help their clients understand the various legal exemptions and deductions. A CA’s job in tax planning is to counsel and lead their clients throughout the entire year. They support their clients in choosing assets and spending that will lower their tax liabilities and boost tax savings.
These are some ways a CA can assist you in reducing your tax liability:
Via Section 80D of the Income Tax Act
Via Section 10 of the Income Tax Act and Section 80C of the Income Tax Act by using tax-saving instruments such as the following:
- National saving certificate
- National pension scheme
- Employee provident fund
Together with other Income Tax Act deductions and exemptions, you can take advantage of tax-saving tools by working with a CA. A CA can provide services that can help you save money and grasp the intricate tax laws and regulations of India. A CA’s guidance can make tax planning, which takes place throughout the year, simpler and more efficient.
Annual compliance requirements
According to the Income Tax Act and the Companies Act, an OPC must maintain compliance. So, maintaining compliance for an OPC primarily entails completing an annual return with the MCA and an IT return with the IT department. OPCs may additionally be obliged to abide with TDS laws, GST regulations, VAT or CST regulations, service tax requirements, ESI regulations, and other restrictions in addition to the fundamental compliance. Depending on the sector, state of incorporation, number of employees, and sales turnover, an OPC’s compliance requirements may change. A CA can assist an OPC in fulfilling the conditions of annual compliance.
Benefits of hiring a CA for OPC registration
The following sections cover the main advantages of engaging a CA for OPC registration:
Expertise in company law and taxation
Taxes are something you should always double-check before paying, and if the end of the fiscal year is approaching, you should take extra precautions. The amount of taxes that must be paid might be reduced with the assistance of an experienced accountant. This results in sound tax advice, which will ultimately save you from receiving unexpected tax bills.
A CA is a qualified expert in all areas of tax law. He almost always stays abreast of the most recent developments and alterations to the government’s tax regulations.
There are various ways to cut taxes legitimately. This could be done by using spouses and partners to offset revenue, changing your VAT system, or altering customer spending. An excellent CA will be able to advise you on which of these techniques you can apply to your company.
Timely and accurate compliance
Because of their professional competence in all kinds of tax laws and accounting procedures, a CA may aid you in quick and accurate compliance of both pre- and post-registration requirements of an one person company registration.
Avoidance of penalties and legal consequences
A significant feature of a CA’s job profile is to complete and submit forms on time. This assists in avoiding penalties and legal implications. It is easy to become confused up in the technical jargon of the tax department or lose track of several deadlines.
Even tiny fines have the potential to accrue interest over time. This might be a big loss to your firm. Some small firms have been forced to close down because they could not afford to pay the accrued taxes.
Access to professional advice and support
A CA could be employed as a consultant as well. With his understanding in the financial arena, he could make accurate predictions about market patterns. This implies that you will make wise investments and maximize your returns.
They help you stay focused
Accountants handle more than just accounting; they also handle other parts of your business. They assist you with resource allocation, tax compliance, and of course balance sheet preparation. If you try to handle everything on your own, you might not have time to concentrate on your company’s key functions, such as sales.
They help you find work-life balance
No matter how well-established your firm is, establishing a work-life balance is difficult for many people. Accountants can handle the menial activities that consume your time and prevent you from spending more time with your family.
They ensure you a professional reputation
The ideal accountant will support you and effectively represent your business. This is much more crucial for start-up companies. Building a strong network with banks and other investors may be facilitated by having a high market value and recognition.
They help you in promoting success of the company
Those who work with established CAs say that it is a vital part of success for them.
They provide youa fresh perspective
Company owners are so engrossed in their everyday operations that sometimes they may fail to see the entire picture. Being an outsider in this situation, a CA might offer a new viewpoint that you might have missed.
They understand taxes
Even though this may seem like common knowledge, keep in mind how quickly laws and regulations can change. It is certainly not easy to keep them all in check. A CA may relieve you of that stress and ensure that your company remains compliant by timely filing IT returns.
Recap of the role of a CA in OPC registration
The main functions of a CA in the OPC registration procedure are summarized as follows:
- Obtaining the approval of DIN
- Obtaining name approval
- Drafts MOA and AOA before company registration
- Obtaining the approval of INC7, INC 22, and DIR12 documents
- Assessing the eligibility for OPC registration
- Verification and filing of documents with the ROC
- Filing an application for incorporation certificate and PAN or TAN
- Ensuring compliance with statutory and regulatory requirements
- Preparation and filing of financial statements and tax returns
- Accounts management
- Advisory on tax planning and optimization
- Annual compliance requirements
Importance of seeking professional help
It is extremely difficult to complete the registration process for any firm, let alone an OPC, without professional assistance. Hence, you have two options in this regard: either hire the CA of your choice or contact a reputable accounting firm.
For a successful registration of your OPC with an accounting company, we advise you to contact Kanakkupillai.com, the website of Govche India Private Limited, for the reasons listed below:
- Since 2007, Kanakkupillai.com has provided individuals and company owners with exceptional financial and legal counseling services. The team is committed, research-driven, and knowledgeable.
- com has a staff of devoted and highly skilled business analysts, corporate lawyers, company secretaries, chartered accountants, and financial specialists and provides multidisciplinary legal, financial, and business advising services.
Based on our discussion thus far, we believe that this blog will be useful to all readers who are interested in learning more about the functions of a CA during an OPC’s pre- and post-registration processes.
FAQ on One Person Company Registration in India
Restrictions in OPC is they cannot carry out Non-Banking Financial Investment activities, including the investments in securities of anybody corporates. It cannot be converted to a company with charitable objects mentioned under Section 8 of the Companies Act, 2013
The Conditions in formation of OPC is only natural persons who are Indian citizens and residents are eligible to form a one-person company in India. The same condition applies to nominees of OPCs. Further, such a natural person cannot be a member or nominee of more than one OPC at any point in time.
Registration is compulsory for one person company according to Section 2 (62) of the Company's Act 2013, a company can be formed with just 1 director and 1 member. One Person Company registration in India is a type of entity where there are lesser compliances requirements than that of a Private Limited Company.
Employees of one-person company (OPC) is a type of company where there is only a single member. This type of company is relatively new in India, introduced by the Companies Act of 2013. OPCs are popular because they offer many benefits of traditional companies, but with simpler regulations and compliance requirements.
OPC do not allow who are not Indian citizen. He or she cannot be a nominee or shareholder of more than one OPC. And lastly, they should not be minors.
Minimum capital for OPC can be started with a minimum authorised capital of Rs. 1 lakh. There is no mandatory requirement for a minimum paid up capital.
OPC can have 2 directors as per the companies act, 2013, 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.
OPC have limited liability amongst the several advantages an OPC has to offer, one striking benefit it renders is the limited liability to the shareholder. An OPC is a separate legal entity and therefore, the liabilities of the company are not shoved on the face of the shareholder.
OPC pay salary to Director, any remuneration paid to the director will be allowed as a deduction under income tax law, unlike proprietorship.
OPC own property, sale, purchase and own the property like individual. Contractual Rights: OPC, being a legal entity different from its members, can enter into contracts for the conduct of the business in its own name.