A one person company refers to the person who can be the director as well as the stakeholder of his company. Prior to the company’s Act 1956, there wasn’t any such provision of one person company but, the new Company Act 2013, even one person can form a company unlike two or more person required before to form a private limited company.
The one person company does come with a bulk of responsibilities and priorities to be fulfilled within time. There must be annual compliance for one Person Company, twice in a year with six months gap in between. Apart from that, all the tax returns, sales returns, and one Person Company firms compliance must be filed and signed by the directors of the company.
A one Person Company can be formed by a single entrepreneur who desires to start his/her own small business startup and has the business sales turnover above 200 lakhs. Managing all the documents and compliance single-handedly, there are less headache and hassles caused in one Person Company unlike the Private Limited Company where the partners and directors have to file one or the other annual compliance every half month or on a quarterly basis. Many of the potential startups lack knowledge regarding the One Person Company compliance and laws. This article will help you out in understanding the complete process to be taken care of, once you enter the One Person Company.
All the audit requirement one person company, Mandatory compliances for One Person Company, and annual compliance for one Person Company are mentioned below. Take a look and by the end of the article, you will come up with all the tips and methods to be followed up for running your business professionally.
Once the One Person Company gets registered, following stationary products are mandatory to be kept handy always.
OPC PAN Application:
Firstly, the incorporated audit requirement One Person Company or any corporate legal entity must obtain their OPC PAN card. This can be applied online after the incorporation and once you receive the allotment letter, it must be signed by the OPC Director- sealed by the rubber stamp and then couriered to the NSDL office. PAN card will be issued within 15-20days after the receipt of the PAN application from the applicant is submitted.
OPC Bank Account Opening:
The process of opening a bank account for the audit requirement One Person Company is comparatively simple then the proprietorship of bank account opening. Unlike the Private limited company and LLP, An OPC being a corporate entity, no other additional tax registrations or documents are required to open a bank account for One Person Company firm compliance. According to the Reserve Bank of India’s KYC norms, following are the documents required to open a current bank account in the name of mandatory compliance for an One Person Company:
All the documents must be self-attested before submitting it for the opening of bank account must be self-attested with the proper stamp of the company. This is why obtaining a company seal and company letterhead after being incorporated becomes compulsory.
Appointment of Auditor
The audit requirement one Person Company is mandatory. All the companies under the annual compliance for one Person Company must appoint their auditor first. If not, then a practising Chartered Accountant will also do. But, all the process must be completed and executed within 30 days of incorporation. This auditor must be appointed under the consent of the Director for auditing all the financial statements of the company.
OPC Annual General Meeting
The private limited company and LLPs are mandatory to hold an annual general meeting in every financial year with not more than 15 months gap. But, under mandatory compliance with a One Person Company where only one Director has to look after all the process, then it is alright to file all the resolution in a minute-book. The signed and dated resolution by Director of an OPC is supposed to be the meeting of the Board of Directors for all the purposes under the Companies Act. Also, provisions relating to the minimum number of meetings of Board do not apply to an OPC, as it has only one Director on its Board of Directors.
OPC Financial Statements
Under an annual compliance One Person Company, following are the financial statements to be filed and meant to be prepared along with the ROC:
In case of a One Person Company, the cash flow statement necessity has been removed. So, a One Person Company need not prepare or submit a cash flow statement as a part of their financial statement. All they are meant to submit on time is the above-mentioned documents, self-attested and signed & sealed by the company’s rubber stamp.
As discussed below, the One Person Company after being incorporated must bear their self-name board, rubber stamp, seal, and letterhead. Apart from this, there are certain Acts to be followed for a corporate limited business. Following are the mandatory compliances for one Person company that are mandatory to be fulfilled:
For One Person Company firms compliance, all the Income Tax returns as per Companies Act, 1961 are mandatory to be filed and completed. The TDS filing, PF regulations, GST regulations, Service Tax regulations, and so on are required to be filed and compiled as well.
If your business falls under One Person Company then it is kind of compulsory for you to follow up with the rules of mandatory compliances for a one person company. They are easy, simplified and hassle-free if, you have a professional auditor who can keep track of all of your financial statements and prepare the reports for the same in every financial year.
An auditor must be appointed for serving minimum 1-3 years and under this period of time, they are meant to present their company in front of the board of Directors and annual meetings so that, the company stays well-reputed and updated in the eyes of the law and Government.
The better-Chartered Accountant you choose for your one person Company firms compliance to be managed by the better peace of mind can be achieved by you. Running a business isn’t a cake walk. One has to deal with tones of regulations, annual meetings, and mandatory compliances for one Person Company is a whole lot different thing to be achieved. The deeper you get into it the more you require a professional consultant who can enlighten you with all the policies, filings, and board meetings so that, you don’t fall under the penalty category where Rs 200 will be fined each day.
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