With the new Companies Act 2013 introducing One Person Company, we thought of doing a refresh of our earlier comparative chart.
| SL. NO. | FEATURES | ONE PERSON COMPANY (OPC) | PRIVATE LIMITED COMPANY | LIMITED LIABILITY PARTNERSHIP (LLP) | SOLE PROPRIETORY | PARTNERSHIP FIRM |
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Legality | It is a separate legal entity | It is a separate legal entity | It is a separate legal entity | Not a separate legal entity | Not a separate legal entity |
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Governed by | Companies Act 2013 | Companies Act 2013 | Limited Liability Partnership Act 2008 | NA | Indian Partnership Act 1932 |
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Registration | Has to be registered with ROC. Certificate of Incorporation is issued by ROC | Has to be registered with ROC. Certificate of Incorporation & Certificate of Commencement of Business is issued by ROC | Has to be registered with ROC. Certificate of Incorporation is issued by ROC | There is no process of registration as it is not a separate legal entity | Not mandatory. Unregistered Partnership Firm will not have the ability to sue. |
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Name | “One Person Company” shall be mentioned in brackets below the name of such company | Name of a private company to end with the words “Private Limited” | Name to end with “LLP” Limited Liability Partnership” | No guidelines | No guidelines |
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Capital Contribution | Minimum authorised and paid up capital is Rs. 1,00,000/- | Minimum authorised and paid up capital is Rs. 1,00,000/- | No limit prescribed in the Act | No guidelines | No guidelines |
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Minimum number of Directors/Partners | 1 Director who has to be a Resident of India | 2 Directors out of which 1 director has to be a resident of India | 2 Designated Partners out of which 1 director has to be a resident of India | No guidelines | 2 Partners |
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Minimum number of shareholders/members | 1 shareholder who has to be a Resident of India. He has to appoint a Nominee in case of his death or incapacity to contract | Minimum 2 shareholders. Can be Body Corporates & foreign nationals also | NA | NA | NA |
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Minimum number of Meetings including Board & General Meetings | At least 1 Board meeting in each half year and the gap between 2 meetings should not be less than 90 days. However, no Board Meeting required, if there is only one director. No requirement of AGM. | At least 4 Board Meetings, one in each quarter & the gap between 2 meetings should not be more than 120 days. AGM to be held within 6 months from closure of Accounts. | No specified limits | NA | NA |
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Annual Filings | Financial Statements and Annual Return to be filed with ROC | Annual Accounts and Annual Return to be filed with ROC | Annual Statement Of Accounts And Solvency & Annual Return has to be filed with ROC | NA | NA |
| 10. | Audit | Compulsory, irrespective of share capital and turnover | Compulsory, irrespective of share capital and turnover | Required, if the contribution is above Rs.25,00,000/- or if annual turnover is above Rs. 40,00,000/- | NA | Compulsory |
| 11. | Foreign Nationals as shareholders/ Partners | NA – Has to be a Resident of India | Foreign nationals can be shareholders, however there are separate RBI guidelines to be followed | Foreign nationals can be partners, however there are separate RBI guidelines to be followed | NA | Foreign nationals cannot form partnership firm. |
| 12. | Taxability | No amendment made in the Income Tax Act yet. But may be treated like pvt ltd. | The income is taxed at 30% + surcharge + cess (Surcharge rates will vary) | The income is taxed at 30% + surcharge+ cess (Surchage rates will vary) | As per tax slabs applicable to personal income | The income is taxed at 30% + surcharge+ cess (surcharge rates will vary) |
| 13. | Liability | Limited Liability | Limited liability | Limited liability | Unlimited Liability | Unlimited, can extend to the personal assets of the partners |
| 14. | Conversion | Can be converted into a public/private Company | Can be converted into a Public Company/LLP | Cannot be converted into a Private Company/Public company/OPC | NA | Can be converted to a Private Company |
| 15. | Dissolution | Not prescribed – To follow the same as for Private Limited Company | Very procedural & time consuming. Voluntary Winding up under FTE/ by Order of National Company Law Tribunal | Less procedural compared to Company. Voluntary/ by Order of National Company Law Tribunal | NA | By agreement of the partners, insolvency or by Court Order |
Article by Pooja Shah, Associate with NovoJuris. Disclaimer: This is a generic note. Please consult your lawyer.
