One Person Company v/s Private Limited Company

By Hiral Vakil on May 6, 2019

One Person Company(OPC) is a recently introduced concept 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 whereas other business entities like Partnership Firm, Limited Liability Partnership, Private Limited Company and Public Limited Company require two or more individuals to partner and run a business. Therefore, OPC is viable option for those looking to start a registered proprietorship firm.

Attributes One Person Company Private Limited Company
Recommended For Individual Proprietor. Multiple Promoters.
Minimum Owners 1 Owner & 1 Nominee 2 Shareholders.
Maximum Owners 1 Owner. 200 Shareholders.
Board of Directors At least 1 Director. At least 2 Directors.
Shareholding 100% of shares held by a single person. 100% of shares cannot be held by a single person. Minimum of two shareholders required.
External Investment Difficult to obtain Easily Available.
Credibility Low High
Compliance Requirements Annual Return Filing. No Board Meetings if only one director & No General Meetings. Annual Return Filing, Board Meetings & General Meetings.
NRI or Foreign Nationals Only Indian Citizens and Indian Nationals are allowed to start. NRIs or Foreign Nationals are also allowed to start and manage.
Mandatory Conversion If annual turnover exceeds Rs. 2 crores or paid-up capital exceeds Rs. 50 lakhs, then mandatory conversion into Private Limited Company. No mandatory conversion.
Procedure Obtain DSC (Digital Signature Certificate), Obtain DIN (Directors Identification Number), Name Approval, Filing for Incorporation & File Nominee details. Obtain DSC (Digital Signature Certificate), Obtain DIN (Directors’ Identification Number), Name Approval & Filing for Incorporation.