One Person Company and Private Limited Company are two different business forms of forming a business, governed by the Companies Act,2013.
The One Person Company is owned by a single person who solely carries on all the business activities, while the Private Limited is registered and carried on by many or jointly by the members of the company.
Below table illustrates more difference between One Person Company and Private Limited Company
Particulars | One Person Company | Private Limited Company |
Section | 2(62) of Companies Act, 2013 | 2(68) of Companies Act, 2013 |
Definition | One person company, means a company which has only one person as a member. | A company having a minimum paid-up share capital as may be prescribed, and which by its articles, -
|
Applicable law | Companies Act, 2013 | Companies Act, 2013 |
Liability | Limited or Unlimited | Limited |
Number of members | Minimum and Maximum of 1 only | Minimum of 2 and Maximum of 200 |
Directors | Minimum 1 Maximum 15 | Minimum 1 Maximum 15 |
Statutory Audit | Mandatory | Mandatory |
Board meeting | One meeting is conducted every 6 months or half yearly. | One meeting is conducted every 3 months or quarterly. |
Nominee | It is prescribed to appoint a nominee to retain the character of perpetual succession. | There is no provision to appoint a nominee to the members of the company. |
Minimum share capital | Not required to have a minimum share capital. But when the capital exceeds 50 lakhs OPC gets converted to Private Limited. | No requirement for minimum share capital. |
Filing of Annual Returns | Financial Statements and Annual Returns has to be filed with the registrar. | Annual returns and accounts has to be filed with ROC. |
Suffix of the company | Should end with OPC. Ltd. | Should end with Pvt. Ltd. |
Taxability | OPC is taxable @ 30% + surcharge and cess. | Private Companies, have to pay tax @ 30% on total income including cess and surcharges. |
Annual compliance | The annual compliance will include filing forms with Ministry of Corporate Affairs for each financial year. | The annual compliance will include filing forms with Ministry of Corporate Affairs for each financial year. |
Investment by Foreign National | Not eligible for FDI (Foreign Direct Investment), as only Indian resident can become a member of the company. | NRI’s, foreign nationals and bodies, are allowed to hold shares governed by FDI guidelines through automatic route. |
Raising of funds | Raising of funds from investors is not allowed. | Raising of funds is allowed through various ways including issue of equity, right issues, venture capital, internal funding. |
Business activities | A certain activities like investment in securities, non – banking financial activities are not allowed. | With prior approval from the concerned authority can indulge in any business activities. |
Conversion | When the annual sales turnover exceeds 2 crores, automatically gets converted to Private Limited. | No requirement for obligatory, conversion under any case |
Control and ownership | Owned and controlled completely by one person | Not owned and controlled by a single person and hence the sole decision making is restricted. |
Transferability | Can be transferred by altering Memorandum of Association | Can be easily transferred |
