According to the provisions of the Companies Act, 2013, OPC is a type of private company. But One Person Company enjoys the more privileges with the lesser compliances as compare to the private company.
Private limited company is the one of the popular form of business entity which provides the legal protection to the shareholders by way of limited liability. Minimum two members are required to form a private limited company.
OPC (One Person Company) is a new hybrid form of business entity which needs only one member to form who can be a deemed first director as well. The sole owner enjoys the benefit of limited liability.
Following are some common features share by both the entities:
Particulars
OPC & Private Limited Company
Prevailing Law
OPC and Private limited company both the entities are prevailed by the Companies Act, 2013
Registration
OPC as well as private limited company required to register with the MCA (Ministry of Corporate Affairs) according to the companies act.
Name Approval
Names of both the entities need to get name approval from the ROC (Registrar of Companies).
Liability of the member
Sole member in case of OPC and all the shareholders of private company has limited liability to the extent of the value of their shares.
Legal Status
OPC and private limited company are the separate legal entities from its members which means personal assets of the shareholders are not liable for any loss incurs by business.
Taxability
As the concept of OPC is not recognised under Income Tax Act, income of both the entities are taxed with the same rate of 30% plus education cess in addition to surcharge if applicable.
Minimum Capital Contribution
Minimum Rs.1, 00,000 is required as paid up capital to form private limited company or one person company.
Statutory Audit
Appointment of auditor is compulsory within 30 days from the date of incorporation for statutory audit irrespective of the share capital or turnover of the company.
Following points clearly differentiate the Private Limited Company and One Person Company:
One Person Company
Private Limited Company
Name of the entity
The name of the One Person Company must be ended with the word ‘OPC’ in the brackets.
The name of the company must have suffix ‘Private Limited’.
Number of shareholders
Only one member is required to form One Person Company.
Minimum- 2 members
Maximum-200 members
Number of directors
Minimum one director is required which can be extent to maximum 15 without any special resolution.
Minimum two directors are required to form a private company which can also be extent to maximum 15.
Transferability
In one person company shares can be transfer only by altering the MOA (Memorandum of Association).
In private company shares can be transfer easily.
Appointment of nominee
Appointing a nominee is necessary by the sole member of the company who must be a resident of India.
No such requirement in case of private company.
Board Meeting
One board meeting must be hold in each half of the calendar year and the gap between the meetings must be at least 90 days. In case of one director, no need to hold a board meeting.
One board meeting must be hold in each quarter of the calendar year and the maximum gap between two meetings can be 120 days.
Annual General Meeting (AGM)
In case of OPC no requirement to hold an AGM.
In private company an AGM is required to conduct within 180 days from the end of the financial year.
NRIs or foreign nationals as shareholder
NRI or foreign nationals cannot be a member of the OPC because a natural person who is a resident of India can be a member or nominee of the company.
There is no such restriction in private company. NRI can be a shareholder in private company.
Conversion
OPC can be converted into private company after two years of incorporation or by crossing the threshold limit.
A private company can be converted into One Person Company. But, threshold concept is not applied to the private company.
Annual Filings
Financial statements (excluding cash flow statement) and annual return required to be filed with the registrar.
In case of private company annual accounts and annual return are required to be filed with the ROC.