Difference Between Pvt Ltd and OPC

Difference Between Private Limited and OPC

One Person Company and Private Limited Company

OPC and Private Limited Company are two different business structures governed by the Companies Act. The concept of One Person Company encourages single and enthusiastic entrepreneurs to operate own venture. However, Private Limited Company requires two persons to incorporate the company. 

 

Do you want to start a new business but have confusion as to what structure of company you should choose? This article might help you to ease your decision.

What is the meaning of OPC and Pvt Ltd Co.?

One Person Company means a Company which has only one person as its member. An OPC is effectively a company that has only one shareholder as its member. 
 
A Private Limited Company is the form of the company where minimum two members are required and maximum number of members can be 200. The liability of the members of a Private Limited Company is limited to the amount of shares held by them.

Comparison between OPC and Private Limited Company

There are few similarities as well as a few differences between the OPC and Pvt. Ltd. Co. Let us discuss both here for your better understanding.

Similarities Between OPC and Pvt. Ltd. Co.

  • Separate Legal Entity: Both of them have separate legal entity. That means OPC or Private Ltd Co. is treated as a different individual in the eyes of law. 
  • Benefits on taxes: To the both types of business structures tax benefits are given. The tax benefits would be 25% from the profits.
  • Limited Liability: In case of OPC the Sole owner and in case of Pvt. Ltd. Co. the shareholders have limited liability to the extent of their shares.
  • Registration Process: Both the companies are required to be registered with the Ministry of Corporate Affairs.

OPC and Private Limited Company – Quick Comparison Table

ParticularsOPC Pvt. Ltd. CO.
Law ApplicableCompanies Act 2013Companies Act 2013
Minimum share capitalNo requirement for minimum share capital. If capital exceeds 50 lakhs, opc gets converted to Pvt. Ltd.No requirement for minimum share capital
Members required

Minimum one

Maximum one

Minimum two

Maximum up to 200

Directors required

Minimum one

Maximum 15

Minimum two

Maximum 15

Board meetingOne meeting in each half of the year. The gap between the two meetings must be at least 90 daysOne meeting in each quarter of the year. The maximum gap between the two meetings can be 120 days
Statutory AuditCompulsoryCompulsory
Annual FilingFinancial Statements and Annual returns to be filed with registrarAnnual accounts and Annual returns to be filed with RoC
LiabilityLimitedLimited
Transferability of sharesCan be made by altering MOACan be easily transferred
Foreign Direct InvestmentNot eligible for FDIEligible via automatic route
Suitable to which typeIndividuals whose capital requirements are 50 lakhs and turnover is less than 2 crsBusiness, trade, manufacturers, large industrial establishments
Company NameShould end with (OPC) Pvt. Ltd./ (OPC) Ltd.Should end with Pvt. Ltd.

 


Created & Posted By Kiran
Marketing Expert at TAXAJ

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