Introduction

A One Person Company (OPC) is a popular business structure for individual entrepreneurs in India, offering corporate benefits with minimal complexity. However, despite its simplified framework, an OPC is still subject to the Companies Act, 2013 and other regulatory laws. Failure to comply with these statutory obligations can lead to financial penalties, legal proceedings, and reputational damage. It is essential for OPC owners to understand the consequences of non-compliance to avoid disruptions and ensure smooth business operations. This article briefly explains the key penalties associated with various types of non-compliance in an OPC.

1. Non-Filing of Annual Return (MGT-7A)
Every OPC must file its annual return using Form MGT-7A within 60 days from the end of the financial year. Failure to file on time attracts a late fee of ₹100 per day, with no maximum cap, until the form is submitted. Continued non-compliance may also trigger further scrutiny from the Registrar of Companies (RoC).

2. Delay in Filing Financial Statements (AOC-4)
OPCs must file their financial statements using Form AOC-4 within 180 days from the end of the financial year. Non-filing leads to a penalty of ₹100 per day, applicable to both the company and the director. This penalty is in addition to the filing fee and can accumulate rapidly.

3. Non-Appointment of Auditor
Failure to appoint a statutory auditor within the stipulated time can result in a penalty of ₹25,000 for the company and ₹5,000 for every officer in default. Continuous failure may even lead to disqualification of the director and impact future compliance filings.

4. Failure to Maintain Statutory Registers
An OPC is required to maintain records such as the register of members, minutes of meetings, and financial statements. Non-maintenance of these records can lead to fines of up to ₹1 lakh for the company and ₹50,000 for the officer in default.

5. Non-Compliance with Income Tax Filings
OPCs must file income tax returns annually using Form ITR-6. Delay or failure may result in:

• A late fee of ₹5,000 to ₹10,000 under Section 234F
  
• Interest penalties under Sections 234A, 234B, and 234C
  
• Further scrutiny or prosecution in case of willful tax evasion
  

6. GST Non-Compliance (If Applicable)
If an OPC is registered under GST, late filing of returns such as GSTR-3B or GSTR-1 results in penalties:

• ₹50 per day for delay in normal returns
  
• ₹20 per day under the NIL return category
  Interest at 18% per annum may also apply on outstanding tax amounts.
  

7. Violation of Conversion Rules
If an OPC exceeds the threshold of ₹2 crore turnover or ₹50 lakh paid-up capital, it must convert to a private limited company within 6 months. Failure to do so may result in a penalty of ₹10,000, with an additional ₹1,000 per day of continuing default.

8. General Penalty for Other Defaults
For any offence under the Companies Act where no specific penalty is provided, the company and officer in default may be fined up to ₹10,000, and in case of continuing default, an additional ₹1,000 per day.

Conclusion

Compliance is not just a legal formality—it is a safeguard against operational setbacks and reputational harm. For OPCs, the cost of non-compliance can be significant, both financially and administratively. Timely filings, accurate documentation, and awareness of statutory deadlines are essential to avoid penalties and ensure uninterrupted business growth. Staying compliant not only protects the company but also enhances its credibility with clients, regulators, and future investors.

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