[Infographic] Differences Between Private Limited Company and One Person Company

Private Limited Company is an old concept in India and One Person Company is relatively new. Though both are covered under the same Law in India the structure of both differs in materiality. We have got many queries where our customers ask for the differences between Private Limited Company and One Person Company. Hence, we thought it was necessary to make an exhaustive comparison.

For instant comparison we have included this Infographic for differences between Private Limited Company and One Person Company. An exhaustive discussion on the differences has been undertaken later in the article.

We will discuss the differences between Private Limited Company and One Person Company in greater detail as below:

1. Name

Words “Private Limited” are used after Private Limited Company’s name however, letters “OPC” are used after One Person Company’s name.

2. Structure Recommended for

Private Limited Company is recommended for startups and SME’s including those in the IT sector however, One Person Company is recommended for single promoters.

3. Minimum Directors

In case of Private Limited Company the minimum number of directors required is 2. As the name suggests in the case of One Person Company the minimum and maximum number is 1.

In case of a One Person Company, a nominee has to be appointed.

4. Registration Cost

The registration cost of registering a Private Limited Company is a little more than and One Person Company.

5. Funding

Private Limited Company is ideal for taking funding. In case of One Person Company the since it is single promoter company funding is not possible

6. Conversion

A Private Limited Company can be easily converted to either a Public Limited Company or a Limited Liability Partnership. One Person Company can be converted to Private Limited or Public Limited Company.

Conclusion

Depending upon the nature of your business you can select the type of entity you would want to form. Normally if the business can undertake more compliance of Registrar of Companies then Private Limited Company formation can be more helpful for a business in the long term.

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