Does One Person Company with no transaction require ITR & Annual filing ?

One Person Company (OPC) is a business entity in which there is only one owner with limited liabilities who can act both as a shareholder as well as the director. This company is similar to Private Limited company but having limited annual compliances. One person company Is suitable for small and medium size of business. May individual setup One person company but may not start work in company. Company is active but there are no transaction in OPC or there is losses in company. As director you must be having question as whether NIL Income tax filing is compulsory for OPC ? Does audit is compulsory for my One person company ? My company having no transaction do I still need to do Company annual compliances.

For above question answer is Yes. One person company with no transaction requires to file ITR & Annual compliances. OPC need to submit annual compliances to department. Annual filing is needed to keep status of company active with MCA. OPC with no transaction need to maintain following annual compliances.

There are 3 Parts of Annual Compliance of OPC

1. Statutory Audit by CA
2. Income Tax Return Filing
3. Company Annual Filing compliance

1.OPC Audit by CA

As per Section 139 of Companies act 2013 every company Incorporated under Companies Act 2013, get its accounts audited by Charted Accountant. OPC having Nil transaction still required to get its books of account audited by Chartered Accountant. For OPC financial year start from April and closes at March.

OPC Company which even with no profit may consist of below transactions

1. Capital Deposit by Promoter
2. Preliminary Expenses
3. Provision for Annual Compliances
4. Office Rent
5. Salary of director , employees

2.Income Tax Filing

Under Section 139(1), in the following cases the filing of Income Tax Return is Mandatory for Any private, public, domestic or foreign country located and/or doing business in India. As per this section for OPC with no transaction still need to file annual income tax return. For FY 2019-20 OPC income tax return filing date is 30^th September 2020.

• Due date 30 September
• For non filing late fees upto Rs. 10000/- applicable
• To Carry forward loss ITR filing in time is important

3. Annual Compliance

As per companies Act each OPC company need to follow compliance such as filing of financial statement , filing of annual return, auditor appointment etc. For meeting these annual compliance company need to held meetings , pass board resolutions etc. Once company closes its financial year company need to submit annual filing returns to MCA.

Private Limited company annual filing forms are AOC 4 , MGT-7 and ADT-1. In AOC-4 company submits information of its financial statements. In MGT-7 company submits its annual return and ADT-1 is required for auditor appointment in company.

Conclusion

Director of One person company is responsible for maintain annual compliance of company. For Non compliance OPC may attract late filing fees and penalties. OPC with no transaction may choose to file OPC Nil annual return to avoid further late filing fees.