A one-person company (OPC) is a company formed by one person. According to section 2 (62) of the Company Act  2013, such a company can be established with only one director and one member. The OPC structure was introduced to allow sole proprietors to establish and operate limited liability corporations. It was created primarily to assist all these single-member companies. 

For the prosperity of such companies, Finance Minister Nirmala Sitharaman announced in approving the union Budget 2021-22 that there would be no restrictions on paid-in capital and average annual sales of sole proprietors.

OPC Compliance Requirements

Compliance Requirements For An OPC 

Company Stationery 

After registration, it is recommended to purchase the following stationery items.  

Nameplate: All companies, including OPC, are required to display the company’s name outside the workplace. 

Company Stamps: Rubber stamps are required to execute various legal documents related to banking functions, board resolutions, etc. Round and straight stamps must be purchased in the name of the company and its directors. 

Letterhead: The company name and address should be printed on the letterhead of all documents, invoices, notices, circulations, and other official documents issued by OPC.

OPC PAN application 

The most important step after integrating OPC  is to get your PAN number. The application must be formally signed by the  OPC Director and submitted to the NSDL office. A certified copy of the legal entity establishment certificate must also be submitted with the PAN application. The entire process of getting a PAN may take approximately 15 days from the date you receive your application.  

Open a Bank Account 

The process of opening an OPC bank account is very simple. Because it is an official body based on the Companies Act. No additional tax returns or registration is required. 

Due to the regulations of RBI KYC, the following documents are required to open a bank account. 

  • A self-certified copy of the OPC founding charter 
  • Memorandum of association
  • Articles of association  
  • Resolution to open a bank account on behalf of  OPC 
  • Copy of  PAN allotment Letter 
  • Director ID  
  • Phone bill 

It is important to note that all the above documents must be self-certified with an OPC seal and the CEO’s signature. 

Auditor Appointment 

Within 30 days of the establishment of the legal entity, the first auditor, a certified accountant, must be appointed to audit the financial statements and accounting of the OPC. 

This is because, in the case of OPC, it is necessary to carry out a statutory final examination. The OPC must also appoint a five-year auditor on Form ADT1 within 15 days of the first annual general meeting. 

Annual Meeting 

Unlike all other companies,  OPC does not need to hold a general meeting annually. In addition, meeting quorum requirements do not apply to OPCs. 

Since the board of directors consists of only one person, the resolution of the board of directors is acceptable and can be entered in the logbook. This resolution, signed by the only director, counts as a general meeting of the company. 

However, it is important to remember that according to section 173 of the Act, at least one board meeting must be held every half of the calendar year, and the interval between the two meetings must be at least 90 days.

Annual Filing For OPC (MGT-7) 

The OPC annual returns filing is submitted to the Corporate Registration Authority. The declaration must be submitted to the ROC as an attachment to Form MGT7. In addition, such an annual declaration must be signed by the company’s secretary. If there is no company secretary, the director must sign the declaration. All OPCs registered in India must submit annually.

Documents Required for MGT7 Form: 

 CIN / PAN 

 List of main business activities 

 Information about shares and shareholding

 List of bonds and loans 

 Details of other securities held by the company 

Financial Documents Required (AOC-4)

All companies, including OPCs, are required to submit the following confirmed documents to the Trade Register within 180 days from March 31  of the fiscal year. 

  •  Balance sheet 
  •  Profit and loss account 
  •  Report 
  •  Statement of changes in shareholders’ equity, etc. 

Documents that need explanation. In the case of an OPC, the need for a cash flow statement is optional and not mandatory.

Advantages of One-Person Company Compliances 

OPC Compliance Requirements
  • To Raise Support from financial speculators: Proper annual compliance of companies, including OPCs, builds the trust of financial speculators and makes it easy to get support from financial speculators.
  • Providing Active Status: Accurate and timely compliance helps maintain the active status of your company.
  • Avoid heavy penalties: Violations often result in heavy fines and penalties. Proper annual compliance helps avoid large fines.