Differences between Company, LLP and OPC

S.

N.

Particulars

Public Ltd. 

company

LLP

Private Ltd. Company

OPC

1

Statute

It is governed by “The Companies Act, 2013”.

It is governed by “The Limited Liability Partnership Act, 2008“.

It is governed by “The Companies Act, 2013”.

It is governed by “The Companies Act, 2013”

2

Incorporation documents

Memorandum of Association and Articles of Association are the main incorporation documents.

Limited liability partnership agreement is the main Incorporation document.

Memorandum of Association and Articles of Association are the main incorporation documents.

Memorandum of Association and Articles of Association are the main incorporation documents.

3

Number of Partners/ Shareholders

Shareholders: Minimum Seven members.

Minimum two partners and Maximum limit is not specified.

Shareholders: Minimum Two and maximum Two Hundred Members.

Shareholders: Only One Shareholder.

4

Maintenance of

Accounts and

Audit

Maintenance of accounts is Compulsory and Audit if applicable

Accounts are required to be audited if the turnover exceeds Rs.40 Lakhs or contribution exceeds Rs.25 Lakhs.

Maintenance of accounts is Compulsory and Audit if applicable

Maintenance of accounts is Compulsory and Audit if applicable

5

Filing of Annual Return and Financial Statements.

Filing of Financials is compulsory, within 30 days from the date of Annual General Meeting.

Filing of Annual Return is compulsory, within 60 days from the date of Annual General Meeting.

Filing of Annual Return is compulsory within 60 days from the close of the financial Year.

Accounts and Solvency to be filed within 30 days from the end of six months of the financial year to which the Statement of Account and Solvency relates

Filing of Financials is compulsory, within 30 days from the date of Annual General Meeting.

Filing of Annual Return is compulsory, within 60 days from the date of Annual General Meeting.

Filing of Financials and Annual returns is compulsory, within 180 days from the date of closure of financial year.

6

Liability of Partners

Liability of members is Limited to Capital of the company.

Liability of partners is Limited to Capital Contribution in all Cases except ‘deliberate fraud’.

Liability of members is Limited to Capital of the company.

Liability of member is Limited to Capital of the company.

7

Admission of minor as participants

Minor cannot be appointed as a Director, Legal Guardian can hold the shares on behalf of the minor.

Minor cannot be admitted either as a Partner/Designated partner in the LLP.

Minor cannot be appointed as a Director, Legal Guardian can hold the shares on behalf of the minor.

Minor cannot be appointed as a Director, and also as the Sole Shareholder.

8

Suit against and by

A Public company can always sue and can be sued in its own name.

LLP can always sue and can be sued in its own name.

A private company can always sue and can be sued in its own name.

A OPC private company can always sue and can be sued in its own name.

9

Management/ Directors

Management is done by Board of Directors.

(Minimum 2 and maximum 15)

Management is done by Designated Partners. (Minimum 2)

Management is done by Board of Directors. (Minimum 2 and maximum 15)

Management is done by Board of Director(s). (Minimum 1 and maximum 15)

10

Director Identification Number/

Each Director requires to have a unique DIN before being appointed as a Director of Public Company.

Each designated Partner requires having a DPIN before being appointed as a Designated Partner of LLP.

Each Director requires to have a unique DIN before being appointed as a Director of Private Company.

Each Director requires to have a unique DIN before being appointed as a Director of OPC Private Company.

11

Interest on Capital contribution by participants

Interest on capital is not allowed as deduction.

Interest on capital is allowable as deduction in the hands of LLP subject to limits.

Interest on capital is not allowed as deduction.

Interest on capital is not allowed as deduction.

12

Management remuneration

Management remuneration is subject to Section 197.

Management remuneration is allowable as deduction in the hands of registered firm subject to limits.

Management remuneration is allowable as deduction in the hands of private company and there is no limit specified.

Management remuneration is allowable as deduction in the hands of OPC company and there is no limit specified.

13

Distribution of profit

Public company has to pay dividend distribution tax on dividend.

Profit is exempt in the hands of shareholders.

No tax is to be paid on the distribution of profit by the LLP.

Profit is exempt in the hands of partners.

Private company has to pay dividend distribution tax on dividend.

Profit is exempt in the hands of shareholder.

OPC Private company has to pay dividend distribution tax on dividend.

Profit is exempt in the hands of shareholder.

14

Loans and advances by the entity to the participants

Subject to Section 185 of Companies Act, 2013.

It is not taxable. Except in the case of private company converted into LLP for the first three years after conversion.

It is taxable as deemed dividend u/s 2(22)(e) of the Income Tax Act, 1961, if certain conditions are met.

It is taxable as deemed dividend u/s 2(22)(e) of the Income Tax Act, 1961, if certain conditions are met.

15

Nomenclature

Name to contain ‘Public Limited’ as suffix.

Name to contain ‘Limited Liability Partnership’ or ‘LLP’ as suffix

Name to contain ‘Private Limited’ as suffix

Name to contain ‘Private Limited (OPC)’ as suffix

16

Meetings of Partners/Directors/Shareholders

Board Meetings and General Meetings are compulsory.

Board Meetings:

First Board meeting: within 30 days from the date of incorporation.

Subsequent Board meetings: Minimum number of four meetings, every year, with a gap of not more than 120 days between two consecutive meetings of the Board.

Annual General Meetings:

1stAGM: 9 months from the close of financial year.

Subsequent AGM: 6 months from the close of financial year.

Gap between two AGM: Not more than 15 months from the last AGM.

As per the terms mentioned in the LLP Agreement.

Board Meetings and General Meetings are compulsory.

Board Meetings:

First Board meeting: within 30 days from the date of incorporation.

Subsequent Board meetings: Minimum number of four meetings, every year, with a gap of not more than 120 days between two consecutive meetings of the Board.

Annual General Meetings:

1stAGM: 9 months from the close of financial year.

Subsequent AGM: 6 months from the close of financial year.

Gap between two AGM: Not more than 15 months from the last AGM.

Board Meetings are mandatory but convening of Annual General meeting is not compulsory.

Board Meetings:

First Board meeting: within 30 days from the date of incorporation.

Subsequent Board Meetings: a minimum of one Board meeting in each half of a calendar year and the gap between the two meetings is not less than ninety days.

17

Quorum for meetings

In case of Board meetings: 1/3rd

of the total directors, subject to a minimum of 2 Directors.

In case of General Meetings: 5-less than 1000 members

10-1000 to 5000 members

15-more than 5000 members.

As per the LLP Agreement

In case of Board meetings: 1/3rd

of the total directors, subject to a minimum of 2 Directors.

In case of General Meetings: Two

Shareholders physically present

In case of Board meetings:

1/3rd of the total directors, subject to a minimum of 2

Directors, if there is more than one Director.

In case of one Director, then the sole director will be the quorum.

18.

Foreign Direct investment [FDI] in the form of capital/contribution/equity.

FDI in a Public Company is allowed based on sector specific

Restrictions i.e., either percentage or based on Automatic or prior approval route.

Further FDI in certain sectors have FDI-linked performance related conditions, which are to be complied.

FDI in LLP is allowed in such sectors/activities, where 100%

FDI is allowed under automatic route, without any FDI-linked performance related conditions.

Even such entry is subject to prior Government / FIPB approval.

FDI is not allowed in:

(a) Sectors with less than 100 % FDI under automatic route,

(b) Sectors with Approval route, activities such as Agricultural/plantation and Print media and Sectors in which FDI is prohibited

FDI in a Private Company is allowed based on sector specific

restrictions i.e., either percentage or based on Automatic or prior approval route.

Further FDI in certain sectors have FDI-linked performance related conditions, which are to be complied.

FDI is not allowed, as it is the requirement for a member of a OPC to be a Indian citizen and resident in India shall be eligible to incorporate a One Person Company i.e., shall be a member of the OPC.

19

Rotation of Director

Exact 1/3^rd of director liable to retire by rotation.

Not applicable

Not applicable

Not applicable

20

Transfer of Shares

Freely transferable

Restricted

Restricted

Restricted

21

Audit Committee

Company having

PUC- 10 crore

T/O- 100 crore

Borrowings exceeding-50 crore

Not applicable

Not applicable

Not applicable

22

Women director

Company having PUC-100crore

T/O-300 crore

Not applicable

Not applicable

Not applicable

23

Independent Director

Company having

PUC- 10 crore

T/O- 100 crore

Borrowings exceeding-50 crore

Not applicable

Not applicable

Not applicable

24

Borrowing u/s 180(1)(c )

Applicable

By Board- Existing +proposed=PUC+Free reserves.

If exceeds then Special resolution.

Not applicable

Exempt

Not applicable

25

Related party transaction u/s 188

Applicable

Not applicable

Not applicable

Not applicable

26

Right issue u/s 62

Applicable

Not applicable

Not applicable

Not applicable

27

Eligibility, qualification and disqualification u/s 141(3)(g)

Applicable

Not applicable

Not applicable if PUC is less than 100crore.

Not applicable

28

Appointment of Director other than Retiring Director u/s 160

Deposit 1 lacs

Not applicable

Not applicable

Not applicable

29

Resolutions and agreements filed with ROC

Subject to section 179(3) and to be filed within 30 days from date of passing resolution.

Not applicable

Exempted

Not applicable