Compliance Calendar for One Person Company & Small Company – Companies Act | SEBI Laws

What are the Compliances for One-Person Company & Small Company?

One-Person Company (OPC) and Small Companies in India have specific compliance requirements under the Companies Act, 2013, designed to simplify their operational and reporting protocols compared to larger companies. Here’s a breakdown of the key compliances for each:

One-Person Company (OPC) Compliances:
– Board Meetings: An OPC is required to hold at least one meeting of the Board of Directors in each half of a calendar year, and the gap between the two meetings should not be less than ninety days. However, if there is only one director, this requirement does not apply.
– Annual Filings: OPCs must file their annual returns and financial statements with the Registrar of Companies (ROC). This includes filing Form AOC-4 for financial statements and Form MGT 7 for the annual return.
– Income Tax Returns: OPCs are required to file income tax returns annually.
– Statutory Audit: Every OPC must appoint an auditor who shall audit the financial statements and file the audit report.
– Conversion: OPCs have the option to convert into a private or public limited company if their paid-up share capital exceeds the prescribed threshold or if its average annual turnover during the relevant period exceeds INR 2 crore.
– Books of Account: OPCs must maintain proper books of account.

Small Company Compliances:
A "small company" is defined based on its paid-up share capital and turnover. As of the latest amendment, a small company is one that has a paid-up capital not exceeding INR 2 crore and a turnover not exceeding INR 20 crore.
– Board Meetings: Small companies are required to hold at least two board meetings in a financial year—one in each half of the year, with a minimum gap of ninety days between the two.
– Annual Filings: Similar to OPCs, small companies must file annual returns (Form MGT-7) and financial statements (Form AOC-4) with the ROC.
– Statutory Audit: Mandatory annual audit of financial statements.
Income Tax Returns: They must file returns annually under the Income Tax Act.
– Reduced Filing Fees: Small companies benefit from lower fees for filing forms with the ROC.
– Exemptions in Financial Statement Reporting: Certain reporting requirements in the financial statement can be simplified for small companies.
– Lesser Penalties: For any non-compliance or late filing of documents, the penalties imposed on small companies are typically lower than those imposed on other types of companies.
– Faster Approval Processes: Some processes like name approval can be faster and simpler due to the fewer layers of scrutiny.

Both OPCs and small companies enjoy certain regulatory flexibilities that make it easier to operate and comply with the legal requirements, which is particularly beneficial to entrepreneurs and small business owners. These distinctions help in reducing the administrative burden and streamline operations, encouraging more individuals to venture into business activities.

By Taxmann’s Research and Advisory Team | Corporate Laws

Table of Contents

1. Introduction
2. One Person Company & Small Company Compliance Calendar

1. Introduction

With the introduction of the Companies Act, 2013, in 2014, the compliance burden of every Company has increased substantially irrespective of its nature, be it a Private Limited Company, Public Limited Company, Listed Company, Small Company, Section-8 Company, or One-Person Company (OPC).

In order to increase transparency in reporting, the MCA and SEBI frequently come out with new amendments by way of circulars and notifications. Companies must adhere to all the applicable compliances within the specified due dates. Any non-compliance on the part of companies often results in heavy penalties. It is a good practice to track the relevant compliances as per the applicable provisions of the Companies Act, 2013/SEBI as the case may be.

Under the Companies Act 2013, various compliances must be done on a time-to-time basis. For a better understanding of the same, we have categorised the various Compliances on the following basis:

• Event-based Compliance: Compliance is to be done upon the occurrence or happening of a certain event, like filing E-form INC-22 upon shifting the company’s registered office.
• Time-based Compliance: Compliances are to be done on an annual, half-yearly, and quarterly basis, like the Filing of E-form AOC-4 and MGT-7.
• Specific Criteria-Based Compliance: Some compliances are based on paid-up share capital, turnover, or any other specific requirement, such as filing E-Form AOC-4 (XBRL) or appointing a Company Secretary.

In addition to the above-mentioned compliances, a listed company is also required to make various Quarterly, half-yearly, and event-based compliances and disclosures under the following regulations:

• SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
• Compliances under SEBI (Depositories and Participants) Regulations, 2018
• Compliances under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
• Compliances under SEBI (Prohibition of Insider Trading) Regulations, 2015

This write-up also discusses in detail the compliances w.r.t. to holding of Annual General Meeting (AGM), Minimum no. of Board Meetings/Committee Meetings as required under the Law.

2. One Person Company & Small Company Compliance Calendar

Dive Deeper:
Compliance Calendar for Unlisted Public Companies
Compliance Calendar for Private Limited Companies
Compliance Calendar for Section 8 Companies
Compliance Calendar for Listed Companies
Compliances Based on Threshold Limits under the Companies Act, 2013