Annual compliances for One person Company and other Small Private Companies

Annual compliances for One person Company and other Small Private Companies

What is One Person Company?

The Companies Act, 2013 dictates that any individual who is the sole owner or founder can successfully start a company under One Person Company or OPC. According to this Act, only a single entity can function as the shareholder and as the director. Earlier, the Companies Act, 1956 demanded that a private limited company should comprise of at least of two shareholders and two directors. However, the Companies Act, 2013 sanctioned by both the houses of the Parliament has introduced OPC to encourage self-employment within the legal premises.

What is a Small Company?

-Small company refers to a company excluding a public company which consists of the following characteristics- Firstly, the compensated allocated investment by no means should exceed 50 Lakh rupees or greater than that amount. In any case, the capital shall not exceed 5 Crore rupees.

-Secondly, the earnings from the previous profit and loss account by no means should be more than 2 Crore rupees or higher than that amount. In any case, the amount should not be more than twenty Crore rupees.

Obligatory Compliances for One Person Company

The introduction of the Companies Act, 2013 brought forward much annual compliance. There are a few modifications perceived in the annual compliances following the introduction of Companies Act 2013. These are as follows: It should be noted that annual compliances vary from one business to another. It is different in case of One Person Company,

1. Presently, annual return is prepared in MGT-7 format. Though, prior to this change, annual returns were organized in e-form. However, the new format is quite a lengthy process and as per as Schedule V, demands more details.
2. The second change is observed in the creation of director’s report. The new clauses have included additional details such as the amount of board meetings the directors were present, admission of sexual harassment act, board meeting dates, which takes place throughout the financial years and more.
3. There is a mandatory requirement for submission of receipt of MBP-1 and DIR-8. This denotes that the directors are expected to propose their concern they have in other units. This interest shall be put forward on the first conference of board of directors each financial year. In addition, the directors are expected to offer the company’s disclosure on behalf of non-qualification.
4. Under Section 173 and SS-I, a minimum of two board meetings be supposed to be held in one year. Moreover, at least a difference of 90 days should be there in between two board meetings. However, in situations where more than two board meetings are there, duration of 90 days gap is not necessary.
5. Under Section 134 the Director’s Report that is created is put together with financial declarations. Thereafter, the report is authorized by the Chairman along with the Board and a minimum of two directors of the company or any one of the authorized
6. As per Section 136, all the sanctioned financial statements as well as director’s report, Auditor’s Report should be submitted prior to 21 days of AGM and forwarded to all members of the company. These statements consist of consolidated financial statement as well as Cash Flow Statement.
7. The annual return is filed within sixty days from the date when AGM is held for the interlude of April 1st to March 31st in MGT 7 Form as per Section 92.
8. The Balance sheet, Profit and Loss Account combined with the Director’s Report, Auditor’s Report and AGM Notice bought to be submitted in Form AOC-4 as per Section 137.
9. An Auditor in AGM has to be appointed for duration of 5 years. However, the appointment of Auditor will be approved in every one of the AGM with no necessary requirements of form filing as per Section 139, Small Company as well as unlisted public ltd companies.

Obligatory Compliances for Small Company

The annual compliance that bought to be noted for a small company is as follows: In conclusion, “annual compliances for one person Company and other Small Private Companies” is very important to acquire information before starting a business.

1. There is a mandatory requirement for submission of receipt of MBP-1 and DIR-8. This denotes that the directors are expected to propose their concern they have in other units. This interest shall be put forward on the first conference of board of directors each financial year. In addition, the directors are expected to offer the company’s disclosure on behalf of non-qualification.
2. In case of Director’s Reports, a director’s report shall be created in compliance with Section 134. Moreover, the report should contain all the requisite details related to a small company.
3. Under Section 173 and SS-I, a minimum of two board meetings be supposed to be held in one year. Moreover, at least a difference of 90 days should be there in between two board meetings. However, in situations where more than two board meetings are there, duration of 90 days gap is not necessary.
4. As per Section 96 and SS-II, except OPC, all companies are required to hold a general meeting referred to as Annual General Meeting every year. Furthermore, the meetings shall be specified in the notice when summoned.
5. As per Section 101 and SS-II, the notice of AGM shall be created and forwarded to every single one of directors, Statutory Auditor, and members. This notification shall be provided as a minimum of 21 days prior to AGM. Under any circumstances, if the notice period is shorter, the consent should be acquired from at least 95% of the members who are eligible to cast their vote at the meeting.
6. Under Section 134 the Director’s Report that is created is put together with financial declarations. Thereafter, the report is authorized by the Chairman along with the Board and a minimum of two directors of the company.
7. As per Section 136, all the sanctioned financial statements as well as director’s report, Auditor’s Report should be submitted prior to 21 days of AGM and forwarded to all members of the company. These statements consist of consolidated financial statement as well as Cash Flow Statement.
8. The annual return is filed within sixty days from the date when AGM is held for the interlude of April 1st to March 31st in MGT 7 Form as per Section 92.
9. The Balance sheet, Profit and Loss Account combined with the Director’s Report, Auditor’s Report and AGM Notice bought to be submitted in Form AOC-4 as per Section 137.
10. An Auditor in AGM has to be appointed for duration of 5 years. However, the appointment of Auditor will be approved in every one of the AGM with no necessary requirements of form filing as per Section 139.