The revolution of the corporate laws introduced a variety of concepts related to the types of companies. The concept of One Person Company was one of them. But whether it be a private limited company or a One Person Company, all have to fulfill certain compliances for its smooth functioning.  The introduction of One Person Company is considered to be a game-changer in the corporate sector. This not only provided a new way of business but also provided flexibility and limited liability. The article briefs about what are the One Person Company Compliance that is to be met. 

What is a One Person Company? 

To get to know about One Person Company Compliance, one needs to understand what a One Person Company is. A company constituting only one person as the member of the company is known as a One Person Company. A One Person Company has the same founder and promoter. 

As defined under Section 2(62) of the Companies Act, a One Person Company is a company that has only one person as to its member. Since the members are the subscribers to its Memorandum of Articles or the shareholders, it can be said that a One Person Company has only a single shareholder. While a sole proprietor company is also a company managed by a single person, there is a lot of difference between the liabilities of a sole proprietor company and a One Person Company. 

Compliances of One Person Company  

The One Person Company Compliances are similar to that of a Private Limited Company. One Person Company Compliance which needs to be fullfilled are given below-  

1. MBP-1  

Disclosure of interest in any other company is required to be given in the first Board Meeting or on every change by every Director of the Company. 

2. DIR-8  

DIR-8 is a declaration form by the director that he is not disqualified to act as the director of the company.  

3. DIR- 3 KYC (Directors KYC)  

The director owning a Director Identification Number, to maintain its active status has to file a DIR-3 KYC, failure of which would lead to the inability to file the annual compliance due to the inactive status of the Director Identification Number. It is to be filed before the 30th of September of the next financial year. 

4. AOC-4 (Financial Statements) 

The balance sheet, the profit-loss account and other financial statements of a company are to be filed within 180 days from the end of the financial year as a One Person Company Compliance. 

5. MGT-7 (Annual Return) 

The annual return of a company with details regarding the directors and the company’s member shareholders is to be filed within 180 days from the end of the financial year. 

6. Appointment of Auditor 

In a One Person Company Compliance, Auditor shall be appointed within 30 days of incorporation of the company. Failure to do so. The company will be liable to pay a penalty and no ADT-1 is needed to be filed for the appointment. Annual general meeting an auditor is appointed for 5 years.   

7. Form INC-20A 

Form in respect of the incorporation^[1] of a business is to be filed within 180 days of incorporation. 

8. Board Meeting  

Two Board Meetings are to be compulsorily conducted at regular intervals of time in a calendar year. A minimum of 90 days gap is to be kept between the two board meetings. 

9. Annual General Meeting 

An annual general meeting is a compulsory compliance for all types of registered companies, but for a One Person Company Compliance, conducting an annual general meeting is not required. 

10. Statutory Registers, Minutes Books and Records 

Maintenance of mandatory statutory registers, minutes books and other secretarial records are required to be done. 

11. MSME-I (Half Yearly Return) 

Every Company has outstanding payments dues to micro and small enterprises and in case the payment of the same is pending beyond 45 days, then the Company has to furnish all the return details as per the half-yearly timeline. The first half is from April to September and the second half from October to March. 

12. DPT-3 (Return of Deposits) 

All the Company having any outstanding loan/amount as of 31st March of every financial year has to furnish details and bifurcation of such outstanding amount irrespective of the fact whether such amount is falling under the definition of deposit or not by 30th June. 

13. Income Tax Return of Company 

The income tax return in a One Person Company Compliance is to be made by filing an ITR-6 before the 30th of September of each financial year. 

Conclusion – One Person Company Compliance

Complying with the One Person Company Compliance is what makes a One Person Company lawfully successful. The companies Act, 2013 revolutionized the corporate sector. While sole proprietorship also gave a single person the right and flexibility to make a decision regarding his business, a One Person Company in surplus to the freedom to make decisions also provided the member with lesser and limited liability. Countries such as the USA, UK and Singapore are some of the countries that were already into the One Person Company system before the Companies Act, 2013 in India. The article briefs about the yearly and half-yearly returns and other One Person Company Compliance that are to be filed by the company. For further detail and query regarding One Person Company Compliances contact Bizadvisors.

Read our article:Benefits of One Person Company in India