Comparative Analysis between a Private Limited Company, One Person Company and Limited Liability Partnership
| S.No | Particulars | Private Limited Company | One Person Company (OPC) | Limited Liability Partnership(LLP)
|
| 1. | Minimum Number of Directors and Shareholders | Members/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 Capital | No minimum capital requirement | No minimum capital requirement | No minimum capital requirement |
| 3. | Governing Statute | Companies Act 2013 and rules framed thereunder | Companies Act 2013 and rules framed thereunder | Limited Liability Partnership Act 2008 |
| 4. | Quantum of Compliance | Substantial compliances | Substantial compliances, however, less in numbers as compared to a private limited company | Less compliances |
| 5. | Taxability | Income Taxed at 30% | Income Taxed at 30% | Income Taxed at 30% |
| 6. | Credibility | High | Medium | Moderate |
| 7. | Investor Preference |
High | Low | Medium |
| 8. | Statutory Audit | Compulsory | Compulsory | If Contribution > Rs 25 lacs or, Turnover > Rs. 40lacs |
| 9. | Conversion | Can be converted into LLP, Public company | Cannot 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 Registration | Upto 1 week | Upto 3 to 4 weeks since it’s a new concept introduced vide Companies Act, 2013 | Upto 2 weeks |
| 11. | Maintenance of books of accounts
|
Mandatory | Mandatory | Mandatory |
| 12. | Maintenance of basic statutory records | Resolutions 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 meetings | First 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 meeting | Mandatory | No AGM Required | No AGM Required |
| 15. | Annual Filling | Balance sheet, Profit & loss accounts, Cash flow statement, Statement of change in equity, Annual return in MGT-7 | Balance sheet, Profit & loss accounts, cash flow statement, Statement of change in equity, Annual return in MGT-7 | Statement of accounts and solvency in e-form-8 and Annual return in e-form-11 |
| 16. | Personal Liability | Shareholders and directors are not personally liable for the acts of the company but can be fined and/or imprisoned | Shareholder not personally liable for the acts of the company but can be fined and/or imprisoned in his official capacity | Partners 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)
