Is OPC Required to file Less Compliance than Private Limited Company?
One Person Company (OPC) came into existence from 1st April, 2014 onwards since the introduction of Companies Act, 2013. The concept is new in India but it has already been adopted by many countries around the world. An OPC is a company that is formed with one member only. That member can also be the director. Also, the member needs to appoint a nominee who shall take over the company after death or incapacity of the member. Is OPC Required to file Less Compliance than Private Limited Company?
An One Person Company is the only form of company that is formed according to the number of members. OPC allows a single person to start his own company with a minimum paid-up capital of ₹1 lac.
An OPC uses private limited company as its title. However, the promoter must mention One Person Company below its name. An OPC has to follow all the compliances of a private limited company except for some. The Ministry of Corporate Affairs (MCA) and Companies Act, 2013 are quite particular about these compliances. They must strictly be followed. They must file tax returns regularly.
They should also file the requisite documents with MCA and the Registrar from time to time. However, Companies Act provides certain exemptions to OPC and lessens the compliance burden.
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First, an OPC need not hold an Annual General Meeting (AGM) as its a company with only one member. The date on which the resolution is communicated and entered into minutes book will be deemed as the date of AGM.
Secondly, an OPC needs to conduct only one board meeting every six months and the consecutive board meetings must be held at least 90 days apart from each other.
Another exemption OPCs earn is maintenance of quorum in board meetings as per provisions of Section 174 of the Act. The provision is not applicable on OPCs having only one director on the Board. It is also not required to hold board meetings in case of one director. OPCs are also exempt from mandatory rotation of auditors as required by Section 139(2) of the Act.
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