Comparative Analysis between a Private Limited Company, One Person Company and Limited Liability Partnership

S.No Particulars Private Limited CompanyOne Person Company (OPC) Limited Liability Partnership(LLP)

 

1.Minimum Number of Directors and ShareholdersMembers/Shareholders – 2

Directors – 2

Note: Directors and members may or may not be same.

Only a natural person can be a director, also one person should be an Indian director i.e. resident in India (a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one calendar year)

Member – 1

Director – 1

Nominee of Sole Member – 1

Note: Only a natural person who is an Indian Citizen and resident in India

Designated Partners – 2
2.Minimum Share CapitalNo minimum capital requirementNo minimum capital requirementNo minimum capital requirement
3.Governing StatuteCompanies Act 2013 and rules framed thereunderCompanies Act 2013 and rules framed thereunderLimited Liability Partnership Act 2008
4.Quantum of ComplianceSubstantial compliancesSubstantial compliances, however, less in numbers as compared to a private limited companyLess compliances
5.TaxabilityIncome Taxed at 30%Income Taxed at 30%Income Taxed at 30%
6.CredibilityHighMediumModerate
7.Investor Preference
HighLowMedium
8.Statutory AuditCompulsoryCompulsoryIf Contribution > Rs 25 lacs or, Turnover > Rs. 40lacs
9.ConversionCan be converted into LLP, Public companyCannot be converted into private or public limited company before 2 years, except inc case paid up share capital is increased beyond 50 lacks or its average annual turnover during the relevant period exceeds two crore rupees.Cannot be converted into a company
10.Time Taken for RegistrationUpto 1 weekUpto 3 to 4 weeks since it’s a new concept introduced vide Companies Act, 2013Upto 2 weeks
11.Maintenance of books of accounts

 

MandatoryMandatoryMandatory
12.Maintenance of basic statutory recordsResolutions and Minutes of the board meetings and general meetings.

Share register and share certificate

Resolutions and Minutes of the board meetings and general meetings.

Share register and share certificate.

Minutes book to be maintained to record minutes of meetings of partners.
13.Board meetingsFirst meeting within 30 days from the date of incorporation.

Minimum four board meeting in a calendar year and the gap between two consecutive meetings should not be more than 120 days

No meeting required if the company has only one director.

In case of more than one director, first board meeting to be conducted within 30 days from incorporation.

The OPC shall be deemed to have complied with the provisions of holding board meetings if at least one meeting of board of directors has conducted in each half year of the calendar year and gap between the two meetings is not less than 90 days. If OPC has only one director on its board of directors, the provisions shall not apply.

No compulsory meeting of the prescribed in the LLP act or rules.

Meeting of partner may be called for events prescribed in the LLP agreement.

14.Annual general meetingMandatoryNo AGM RequiredNo AGM Required
15.Annual FillingBalance sheet, Profit & loss accounts, Cash flow statement, Statement of change in equity, Annual return in MGT-7Balance sheet, Profit & loss accounts, cash flow statement, Statement of change in equity, Annual return in MGT-7Statement of accounts and solvency in e-form-8 and Annual return in  e-form-11
16.Personal LiabilityShareholders and directors are not personally liable for the acts of the company but can be fined and/or imprisonedShareholder not personally liable for the acts of the company but can be fined and/or imprisoned in his official capacityPartners are not personally liable for the acts of the LLP but can be fined and/or imprisoned in their official capacity
17.Miscellaneous Private Limited Company is a separate legal entity.

A Private Limited Company can only have a maximum of 200 shareholders or members.

Foreigners are allowed to invest in a Private Limited Company under the Automatic Approval route in most sectors.

OPC is a separate legal entity.

A One Person Company can have only two people, viz. Director and Nominee Director.

Director and Nominee Director cannot be Foreigners.

LLP is a separate legal entity.

A LLP can have unlimited number of Partners.

About Author :  Sumit Wadhwa has a Bachelor’s degree in Commerce from the University of Delhi and holds Professional Affiliation to the Bar Council of Delhi. He is also a company secretary from the Institute of Company Secretaries of India and can be reached at Mob: +91- 97187 04960 / Email: sumit.wadhva08@gmail.com)

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