Private Limited Company vs LLP vs OPC

Selection of the correct form of business entity is the most important decision taken by an entrepreneur. To make choices simpler and assist you in taking a well informed decision, here is a basic comparison chart of the three most common yet credible forms of business in today’s time.

Private Limited Company – The most successful business type.

In a private company, the business owners hold all shares of the company privately. Shareholders may operate the business themselves, or hire directors to manage the company on their behalf. Registering a private limited company results in protection of personal assets, access to more resources, financial assistance and greater credibility.

Limited Liability Partnership (LLP) – A corporate form of Partnership

It exhibits elements of both partnership and corporation. In LLP, one partner is not responsible or liable for another partner’s misconduct or negligence unlike a traditional partnership in which each partner has joint and several liability.
All these three forms of business have the feature if Limited Liability and Separate Legal Entity, ie, the members or partners have no personal liability. Yet, they are different from each other in various aspects.

One Person Company (OPC) – A corporate form of Proprietorship.

One Person Company (OPC) has been recently introduced in India to promote business enterprises that are owned and managed by a single Entrepreneur. OPC allows for a single individual to own and manage the business. One Person Company is therefore a viable option for those looking to start an unregistered Proprietorship.

The Comparison chart will give you a clear distinction between all the three forms of business.

Factors of ComparisonPrivate Limited CompanyOne Person Company (OPC)Limited Liability Partnership (LLP)
Minimum RequirementMembers – 2
Directors – 2
Member – 1
Director – 1
Nominee of Sole Member – 1
Designated Partners – 2
Minimum CapitalNo minimum requirementNo minimum requirementNo minimum requirement
RegulatorRegistrar of CompaniesRegistrar of CompaniesRegistrar of Companies
Compliance RequirementsAnnual Return Filing
Board Meetings & General Meetings
Annual Return Filing
No Board Meetings, if only one director
No General Meetings
Annual Return Filing
TaxationTaxed at 30%Taxed at 30%Taxed at 30%
CredibilityHighMediumMedium
Investor PreferenceHighLowMedium
Statutory AuditCompulsoryCompulsoryIf Contribution > Rs 25lacs or, Turnover > Rs. 40lacs
ConversionCan be converted into LLPCannot be converted before 2 yearsCannot be converted into a Company
Time Taken for Registration15 – 20 Days15 – 20 Days10 – 15 Days
ProcedureObtain DSC (Digital Signature Certificate)
Obtain DIN (Directors Identification Number)
Name Approval
Filing for Incorporation
Obtain DSC (Digital Signature Certificate)
Obtain DIN (Directors Identification Number)
Name Approval
Filing for Incorporation
File Nominee details
Obtain DSC (Digital Signature Certificate)
Obtain DPIN (Designated Partner Identification Number)
Name Approval
Filing for Incorporation
File LLP Agreement
Conclusion:
  • Private Limited Company is the most popular type of corporate entity in India. Therefore its post incorporation compliance’s are easier. Click here for Private Limited Company Registration.
  • Non – convertibility of Limited Liability Partnerships into a Company makes it a less interesting option.
  • One Person Company has been recently introduced in India. Therefore, there may be difficulties in obtaining certain licenses or registration after incorporation of a One Person Company.
Nikita Bhatia
Nikita Bhatia
Nikita Bhatia is the Co-Founder of VenturEasy, an online platform for Company Registration, Tax Consultancy, Trademark Registration, Annual Filings, Accounting and Business Compliances in India. A Chartered Accountant by profession, she has wide experience in the field of Audit, Accountancy, Taxation and Corporate Governance. Her exposure across a wide portion of economy gives her the edge to help startups scale up and guide them effectively in legal, compliances and tax related matters.

2 Comments

  1. Praveen says:

    Dear Nikita,
    I read your blog about type of companies and very good initiative .

    I have been passionate to setup a sustainable venture in farm sector for many year now. Now that dream is turning into reality with a small capital investment for an Argo packaging business in my rural home town (AP) . I look forward to seek your firms help in forming a suitable firm for startup.
    I am in idea stage and my research is in process. My next step is incorporation before I formally invest . Please reply what costs I would need to incur to get an incorporation in my home state AP. Thanks will wait for your reply and support

    Regards Praveen