Sanoj Kumar

Differences between Public Limited Company, Limited Liability Partnership (LLP), Private Limited Company and One Person Company [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 1/3rd 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

(Author can be reached at cssanoj.icsi@gmail.com)

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