Comparison Between One Person Company vs LLP
What is the meaning of One Person Company and a Limited Liability Partnership?
One Person Company (OPC) means a Company that has only one person as to its member. An OPC is effectively a company that has only one shareholder as its member.
A Limited Liability Partnership (LLP) is the form of the business where minimum two members are required and there is no limit on the maximum number of members. The liability of the members of an LLP is limited.
Comparison between OPC and LLP
There are few similarities as well as a few differences between the OPC and Limited Liability Partnership. Let us discuss both here for your better understanding.
Similarities Between One Person Company and Limited Liability Partnership
- Separate legal entity: Both of them have separate legal entity. That means OPC or LLP 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 30% from the profits.
- Limited Liability: In case of OPC the Sole owner and in case of LLP, the liabilities of the partners would be limited.
- Registration Process: Both the types of businesses are required to be registered with the Ministry of Corporate Affairs.
OPC and LLP – Quick Comparison Table
| Particulars | OPC | Limited Liability Partnership |
| Law Applicable | Companies Act 2013 | Limited Liability Partnership Act, 2008 |
| Minimum share capital | No 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 2 Maximum No limit |
| Directors required | Minimum one
Maximum 15 | Two designated partners Maximum not applicable |
| Board meeting | One meeting in each half of the year. The gap between the two meetings must be at least 90 days | Not necessary |
| Statutory Audit | Compulsory | Not compulsory unless partner’s contribution exceeds 25 lakhs or annual turnover exceeds 40 lakhs |
| Annual Filing | Financial Statements and Annual returns to be filed with registrar | Annual accounts and Annual returns to be filed with RoC |
| Liability | Limited | Limited |
| Transfer-ability of shares | Can be made by altering MOA | Can be transferred by executing agreement before a notary public |
| Foreign Direct Investment | Not eligible for FDI | Eligible via automatic route |
| Suitable to which type | Individuals whose capital requirements is less than 50 lakhs and turnover is less than 2 crs. | startups , Business, trade, manufacturers etc. |
| Company Name | Should end with (OPC) Pvt. Ltd./ (OPC) Ltd. | Should end with LLP |
Created & Posted by (Aashu)
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