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difference between one person company and private limited company
The private limited company is a company where shares of the company are owned privately and not offered for sale to the public. There are lots of practical benefits given to private companies by way of new changes made in the Companies Act. Minimum paid-up capital required. RoDTEP Scheme Vs MEIS Scheme – All you need to know, How to apply for Advance Authorisation Online – Step by Step Guide. While in the case of the private limited company, the ownership is divided between two members. Key points of difference between a private limited and a public limited company are: A public limited company is a company listed on a recognized stock exchange and the stocks are traded publicly. The Process of registering a Private Limited Company or LLP. Your email address will not be published. Though both are covered under the same Law in India the structure of both differs in materiality. 5. No Complex Incorporation Method as of One Person Company. Ltd. or OPC Private Limited . What are the Benefits of MSME Registration in India? Advantages of a Private Limited Company • Separate Legal Entity: An entity means something which has a real existence; a thing with distinct existence. The concept of One Person Company encourages single and enthusiastic entrepreneurs to operate their own venture. Therefore, there is now no requirement for any minimum capital to be invested to start a private limited company. 1,00,000. Funding is considered as the most essential step for starting, maintaining, and growing a business. Private Limited Company can raise their shares from different investors. This creates difficulties,as the nominee has a choice to withdraw their consent and the possibilities of withdrawing are quite large in today’s growing competition. But One Person Company enjoys the more privileges with the lesser compliances as compare to the private company. Both the entities can have maximum 15. Sole trader and limited company are two major forms of business. One Person Company and Private Limited Company are two different business structures governed by the Companies Act. One Person Company as well as private limited company is required to be registered with the Ministry of Corporate Affairs. These are the major difference between a private Limited & One Person company. One Person Company and Private Limited Company are two different business structures governed by the Companies Act. Now, let us understand the basic difference between paid-up capital and authorized capital. In a One Person Company, the minimum number of directors to start a company is 1 while in a Private limited Company the minimum number of directors to start a company is 2. The taxation procedure are same for both entities as there are no separate provisions made for One Person Company related to taxation. Here, if one has to choose between the Private limited company registration and LLP one can see the advantages and the difference so as to choose what’s best for them. There was a limit on the minimum capital of Rs. While filing in the petrol you decided to fill in only 2 litres because that was your need. In case of One Person Company, shares can be transferred only by altering the Memorandum of Association. It is a form of corporation that protects its shareholders by restricting ownership and functioning as a separate entity. Name of entity. When starting up, it is very important to decide on the structure of the business as it has many implications for both the owner of the business as well as his dealings with other businesses. 50 lakh, One Person Company must mandatorily convert to a private limited company ( Pvt. OPC Private Limited. In the case of private companies, capital often is sourced from venture capitalists. We hope after reading the article all your confusion related to Private Limited Company and One Person Company is resolved, in case, the doubt still persists, don’t hesitate to contact us. For incorporating private Limited company minimum two person are required while OPC can be registered by single Individual. 2 crore. Private Ltd Company: One-person Company(OPC) Limited Liability partnership(LLP) Governed by: Companies Act 2013: Companies Act 2013: Limited Liability partnership Act 2008: Minimum No of Members: Min.2 members (Can be body corporate also) 1 member who is resident of India, and 1 nominee should be present. 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Updated October 27, 2020: Difference Between LLC and Private Limited Company. One Person Company proposes a Company that has only one person as to its member. We Provide Import-Export consultation services to the Exporters to obtain the benefits under various government schemes for Exporters. Directors of your company can issue unissued shares anytime they wish, even before receiving shareholder authorization. Also, based on the ratio of shares held by each member, the voting power is divided. The confusion between a Private Limited Company and a One Person Company makes people go for an incorrect choice which results in loss. Maintained by Hinal Shah. Shares The major difference between one person company and private company is that one person company is mixture of sole proprietorship and company form of business where private companies are either run by non governmental organizations or by relatively small numbers of shareholders. So when the taxation procedure is same and Private Companies are offering so many other benefits a person must choose private Limited Company over One Person Company. We at AFLEO are always there to help you!! Private Limited Company is an entity which is different from its Shareholders or Directors. When a private company shares need to be transferred, the buyer and the seller will usually reach a private agreement. An OPC is effectively a company that has only one shareholder as its member. Let’s consider the petrol tank of a vehicle. As the name suggest, in case of One person Company, the company name has to have a suffix (OPC) and in case of private limited company, the name of company has to end with suffix Private Limited. Afleo Consultants is a leading DGFT consulting and Licensing firm focused on Directorate General of Foreign Trade (DGFT) and customs related operations. In case of One Person Company the sole owner and  in case of Private Limited Company all the shareholders have  limited liability to the extent of the value of their shares. In a private limited company, the information relating to the company is made accessible in a widely searchable database. In India, in the year 2005, the JJ Irani Committee recommended the formation of OPC. However, Private Limited Company requires two persons to incorporate the company. Starting a private limited company, would allow the promoter to pursue multiple opportunities as the business evolves over time. The company name is "VIJAY CORPORATE SOLUTIONS OPC PRIVATE LIMITED" having CIN: U93000DL2014OPC267546. While a One Person Company has to register annual returns, get its accounts audited, … When you have made up your mind that you want to set up a Company, but you have not decided about which type of Company you want to register? The shareholders could be natural persons or companies, including foreign companies. lower than the cost of registration of a Private Limited Company The major and the most prominent difference between the limited and private limited company is the number of shareholders in the organization and the transferability of shares. Difference between OPCs and Sole Proprietorships. Thus, a private limited company is the ideal type of business entity for growing businesses. OPC: An OPC is for entrepreneurs who are sure they want to have full control over their business. And the concept of one person company refers to a separate legal entity wherein a single person is allowed to run a company limited by its shares. Thus allowing the company to grow in various sectors and chase further opportunities thereon. However, such a business cannot be very large because the Ministry of Corporate Affairs (MCA) requires all OPCs to become LLPs of private limited companies once their revenues cross Rs. All about Kanyashree Prakalpa Scheme – Eligibility and Application Procedure, How to get Online SSI Registration in India, Afleo – DGFT Consultants (MEIS/SEIS/EPCG/Advance Authorisation). Comparison between OPC and Private Limited Company. For the ease of understanding the concept here is a difference between the two mad in terms of its features: Major Differences between One Person Company vs Sole Proprietorship
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