OPC Vs Pvt Ltd Company
Difference between One Person Company And a Private Limited Company
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.
The below table illustrates more differences between One Person Company and a Private Limited Company
Particulars | One Person Company | Private Limited Company |
Section | 2(62) of Companies Act, 2013 | 2(68) of Companies Act, 2013 |
Definition | A one-person company means a company that 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, -
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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 have to be filed with the registrar. | Annual returns and accounts have 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 the Ministry of Corporate Affairs for each financial year. | The annual compliance will include filing forms with the Ministry of Corporate Affairs for each financial year. |
Investment by Foreign National | Not eligible for FDI (Foreign Direct Investment), as only Indian residents can become a member of the company. | NRIs, foreign nationals, and bodies are allowed to hold shares governed by FDI guidelines through an automatic route. |
Raising of funds | Raising funds from investors is not allowed. | Raising of funds is allowed through various ways including issues of equity, right issues, venture capital, and internal funding. |
Business activities | 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 the Memorandum of Association | Can be easily transferred |