{"id":42065,"date":"2020-12-12T18:36:16","date_gmt":"2020-12-12T13:06:16","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=42065"},"modified":"2021-01-19T14:52:01","modified_gmt":"2021-01-19T09:22:01","slug":"one-person-company-v-s-private-limited-company-quick-comparison","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/one-person-company-v-s-private-limited-company-quick-comparison\/","title":{"rendered":"One Person Company V\/S Private Limited Company: Quick Comparison"},"content":{"rendered":"<p><strong>One Person Company<\/strong><\/p>\n\n\n\n<p><strong>Sec 2(62<\/strong>) Of <strong>Companies Act 2013<\/strong><sup><a href=\"https:\/\/www.mca.gov.in\/Ministry\/pdf\/CompaniesAct2013.pdf\"><strong>[1]<\/strong><\/a><\/sup> Defines OPC As:<\/p>\n\n\n\n<ul><li>A Company<\/li><li>Which has only ONE Person as a MEMBER<\/li><\/ul>\n\n\n\n<p>Or<\/p>\n\n\n\n<ul><li>One director \/one <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Shareholder&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A shareholder is an individual or entity that owns at least one share of a company&amp;#039;s stock, granting them partial ownership of the company. This status allows them certain rights, including(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/shareholder\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>shareholder<\/a><\/li><li>An individual carrying out the responsibilities of the director and shareholder.<\/li><\/ul>\n\n\n\n<p><strong>Origin<\/strong><\/p>\n\n\n\n<p>The origin of <strong><a href=\"https:\/\/enterslice.com\/one-person-company\">One Person Company<\/a><\/strong> was made by GREAT BRITIAN through its judgment given in <em>Saloman &amp; Saloman Co Ltd in the year 1925.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">India-<\/h2>\n\n\n\n<p>One Person Company is introduced in India in 2013 via <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Amendment&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;An &amp;quot;amendment&amp;quot; refers to the formal change or correction of a legal document, often involving additions, variations, or deletions to address irregularities or clarify points in an agreement.(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/amendment\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>Amendment<\/a> in the Company Law. It came in force on 20<sup>th<\/sup> September, 2013.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Other Countries<\/h2>\n\n\n\n<p>The concept came much earlier in the other countries like, China (2005), Singapore, France, and USA. &nbsp;The requirements for its formation may differ from country to country.<\/p>\n\n\n\n<p><strong>Background<\/strong><\/p>\n\n\n\n<p><strong><em>JJ Irani Committee in 2005<\/em><\/strong> recommended the concept of One Person Company (OPC). The committee agenda was to create ease of doing business in India and to reduce the burden of compliance requirements on an individual. Prior to this, in India the structure of sole proprietorship was allowed. <strong><\/strong><\/p>\n\n\n\n<p>Mostly small companies are managed by one person only, as per the requirement it has to bring another person to continue as private company. The burden is increased like, compliance requirements of conducting shareholder meetings where the presence of both the shareholders are required. The aim was to promote the small businesses and companies to grow and where small entrepreneurs are not panicked by the procedural requirements.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Characteristics Which OPC Must Have As Per Section 6 Of The Jj Irani Report 2005<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"903\" height=\"152\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image001-14.png\" alt=\"Characteristics of OPC\" class=\"wp-image-42072\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image001-14.png 903w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image001-14-300x50.png 300w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image001-14-768x129.png 768w\" sizes=\"(max-width: 903px) 100vw, 903px\"\/><\/figure>\n\n\n\n<p><b>Salient Features<\/b><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"905\" height=\"368\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image002-1.png\" alt=\"Salient Features\" class=\"wp-image-42073\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image002-1.png 905w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image002-1-300x122.png 300w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image002-1-768x312.png 768w\" sizes=\"(max-width: 905px) 100vw, 905px\"\/><\/figure>\n\n\n\n<p>1. <strong>One Person<\/strong><\/p>\n\n\n\n<p>The feature of this form of company is only one director\/one shareholder. This first member\/ shareholder\/ director acts as the first director of the company. He has complete control over the company. The maximum number of Directors can be appointed are 15.<\/p>\n\n\n\n<p>2<strong>.  Minimum Paid Up capital<\/strong><\/p>\n\n\n\n<p>The minimum paid up capital for this form of entity is Rs. 1 lakh.<\/p>\n\n\n\n<p>3<strong>. Nominee Director<\/strong><\/p>\n\n\n\n<p>Nominee Director is appointed to continue the functions of the company after the death of the sole member who has the control of the firm. The nominee shall be natural person who should be Indian Resident and Citizen. The consent can be obtained in writing from the person who will be nominee. The consent shall be given voluntarily. The name of the nominee shall be stated in the memorandum of association.<\/p>\n\n\n\n<p>4<strong>. Compliances<\/strong><\/p>\n\n\n\n<p>OPC is defined in <strong>Sec 2(62) of Companies Act<\/strong>. There is no compliance burden on the company<\/p>\n\n\n\n<p><strong><em>OPC can be formed in two categories:<\/em><\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"643\" height=\"298\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/OPC.png\" alt=\"Category of OPC\" class=\"wp-image-42075\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/OPC.png 643w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/OPC-300x139.png 300w\" sizes=\"(max-width: 643px) 100vw, 643px\"\/><\/figure>\n\n\n\n<ol type=\"a\"><li>Minimum capital 1,00,000<\/li><li>Restricted transfer of shares<\/li><li>Prohibition on invitation to the public for subscription of shares<\/li><li>Must mention OPC in its name<\/li><li>Nominee director<\/li><\/ol>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"550\" height=\"528\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image004-1.png\" alt=\"One Person Company\" class=\"wp-image-42076\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image004-1.png 550w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image004-1-300x288.png 300w\" sizes=\"(max-width: 550px) 100vw, 550px\"\/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Exemptions Available<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"598\" height=\"528\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image005-2.png\" alt=\"Exemptions Available\" class=\"wp-image-42077\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image005-2.png 598w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image005-2-300x265.png 300w\" sizes=\"(max-width: 598px) 100vw, 598px\"\/><\/figure>\n\n\n\n<ol type=\"1\"><li><strong>CS Signatures&nbsp; on Annual Return<\/strong><\/li><\/ol>\n\n\n\n<p>Section 92 specifies that there must be signatures of Company Secretary on the Annual Return of the Company or in case of no CS, signatures of the director.<\/p>\n\n\n\n<p>2<strong>. No AGM, EGM OR SGM<\/strong><\/p>\n\n\n\n<p>Section 122 states that section 98, section 100 to section 111 is not required for a One Person Company. No necessity to conduct the Annual General Meeting and the Extraordinary General Meeting (EGM). As per Section 114, if any special business transaction occurs through special or general resolution, the resolution has to be mentioned in the minute&rsquo;s book which is to be maintained as per Section 118, which is signed and dated.<\/p>\n\n\n\n<p><strong>3. Directors And Board Meetings<\/strong><\/p>\n\n\n\n<p>As per Section 149, 152, 173 of the act, an OPC can have 15 maximum directors which can be increased after passing special resolution.<\/p>\n\n\n\n<p><strong>4. Signature On Financial Statements<\/strong><\/p>\n\n\n\n<p>The OPC has to file a copy of ROC duly signed and adopted by its members and all other documents with the financial statements within 180 days of the closure of financial year.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Private Limited Company<\/h2>\n\n\n\n<p><strong>Definition<\/strong><\/p>\n\n\n\n<p>Section 2(68) Defines Private Limited Company:<\/p>\n\n\n\n<p>A Company Having<\/p>\n\n\n\n<ul><li>Minimum Paid Up Capital -1,00,000rs<\/li><li>Restriction on transfer of shares<\/li><li>Number of member maximum 200 EXCEPTION in case of OPC<\/li><li>No invitation to the public for the subscription of its shares.<\/li><\/ul>\n\n\n\n<p>This means that a <strong>Private Limited Company<\/strong> is one which restricts the ownership and restricts the transfer of shares to the public. The transfer can be only between its members.<\/p>\n\n\n\n<p><strong>Characteristics of Pvt Ltd<\/strong><\/p>\n\n\n\n<ol type=\"1\"><li><strong>Separate Legal Entity<\/strong><\/li><\/ol>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"906\" height=\"368\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image006-1.png\" alt=\"Separate Legal Entity\" class=\"wp-image-42078\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image006-1.png 906w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image006-1-300x122.png 300w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image006-1-768x312.png 768w\" sizes=\"(max-width: 906px) 100vw, 906px\"\/><\/figure>\n\n\n\n<p>The main feature of the <strong><a href=\"https:\/\/enterslice.com\/company-registration\">Private Limited Company Registration<\/a><\/strong> is that it is a distinct entity. It can own <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Property&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Property refers to the legal designation of ownership over valuable items or assets held by an individual or a business. This ownership grants the holder certain legal rights to use, consume,(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/property\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>property<\/a> in its own name.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Salient Features<\/h3>\n\n\n\n<p><strong>A. Members<\/strong><\/p>\n\n\n\n<p>The minimum members required are 2 and maximum can be 200.<\/p>\n\n\n\n<p>Also, there is requirement of Minimum Two Directors.<\/p>\n\n\n\n<p><strong>B. Limited Liability<\/strong><\/p>\n\n\n\n<p>The liability of the members\/subscribers\/shareholders of the company is limited. This means the member is liable to the extent of the unpaid share (value of the share they take over). The company in case of debts can sell its personal assets in order to pay its debts.<\/p>\n\n\n\n<p><strong>C. Share Capital<\/strong><\/p>\n\n\n\n<p>Rs 1 lakh is the minimum amount of share capital for a private limited company.<\/p>\n\n\n\n<p><strong>D. No Transferability Of Shares<\/strong><\/p>\n\n\n\n<p>The Private Limited Company restricts the transfer of shares to the public.<\/p>\n\n\n\n<p><strong>E. No Investment By The Public<\/strong><\/p>\n\n\n\n<p>Public cannot invest in the shares of a private limited company. Offering of shares is only allowed by a public limited company.<\/p>\n\n\n\n<p><strong>What Are Legal Compliances Of The Private Limited Company<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"849\" height=\"528\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image007.png\" alt=\"Legal Compliances of The Private Limited Company\" class=\"wp-image-42079\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image007.png 849w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image007-300x187.png 300w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/image007-768x478.png 768w\" sizes=\"(max-width: 849px) 100vw, 849px\"\/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Comparison between OPC and Pvt Ltd Company<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"712\" height=\"365\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/Untitled-1.png\" alt=\"Comparison between OPC and Pvt Ltd Company\" class=\"wp-image-42095\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/Untitled-1.png 712w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/Untitled-1-300x154.png 300w\" sizes=\"(max-width: 712px) 100vw, 712px\"\/><\/figure>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/enterslice.com\/learning\/one-person-company-vs-proprietorship\/\">One Person Company vs Proprietorship Firm<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>One Person Company Sec 2(62) Of Companies Act 2013[1] Defines OPC As: A Company Which has only ONE Person as a MEMBER Or One director \/one shareholder An individual carrying out the responsibilities of the director and shareholder. Origin The origin of One Person Company was made by GREAT BRITIAN through its judgment given in [&hellip;]<\/p>\n","protected":false},"author":54,"featured_media":42089,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1322],"tags":[218],"acf":{"service_id":"1"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Private Limited Company V\/S One Person Company - Enterslice<\/title>\n<meta name=\"description\" content=\"This means that a Private Limited Company is one which restricts the ownership and restricts the transfer of shares to the public.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/one-person-company-v-s-private-limited-company-quick-comparison\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Private Limited Company V\/S One Person Company - Enterslice\" \/>\n<meta property=\"og:description\" content=\"This means that a Private Limited Company is one which restricts the ownership and restricts the transfer of shares to the public.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/one-person-company-v-s-private-limited-company-quick-comparison\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2020-12-12T13:06:16+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-01-19T09:22:01+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/preview-full-ONE-PERSON-COMPANY-VS-PRIVATE-LIMITED-COMPANY-QUICK-COMPARISON.png\" \/>\n\t<meta property=\"og:image:width\" content=\"670\" \/>\n\t<meta property=\"og:image:height\" content=\"352\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Sonal Pruthi","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/12\/Sonal.png","authorDescription":"She is B.Com (H), LL.B LLM, Cs (Module 2) And Certification In Cyber Law From ILI Qualified. 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