Tosniwal & Associates
Chartered Accountants

Private Limited Company, OPC and LLP- a comparison
 
The structure of the three most preferred business entities in India-Private Limited Company (PLC), One Person Company (OPC) and Limited Liability Partnership (LLP) is quiet varied. There are different laws and regulations governing each of them. PLC and OPC are governed by the Companies Act, 2013 and the corresponding Companies Act Rules while LLP is required to comply with the statutory requirements of LLP Act, 2008 and the corresponding Rules.
Given below is the comparison chart showing various requirements of PLC, OPC and LLP.
 

Sr. No.	Comparatives	Private Limited Company	One Person Company	Limited Liability Partnership
1	Governing       Law                        and Regulatory Authority	The Companies Act, 2013 and the Ministry of Corporate Affairs (MCA)	The Companies Act, 2013 and the MCA	The LLP Act, 2008 and the MCA.
2	Registration	With    the    MCA            under            the Companies Act, 2013	With the MCA under the Companies Act, 2013	With the MCA under the LLP Act, 2008
3	Legal Structure/Status	Company is a body corporate formed and incorporated under the Companies Act, 2013 and which has a legal entity separate from its members having perpetual succession.	Company is a body corporate formed and incorporated under the Companies Act, 2013 and which has a legal entity separate from its member/director                            and nominee director having perpetual succession	LLP is a body corporate formed and incorporated under the LLP Act, 2008 and has a legal entity separate from that of its partners having perpetual succession.
4	Eligibility	Any individual may form a PLC.	Only a natural person who is an Indian citizen and resident in India-	Any     individual     and            body corporate may be a partner in LLP

 
 

Sr. No.	Comparatives	Private Limited Company	One Person Company	Limited Liability Partnership
			shall be eligible to incorporate an OPC; shall be a nominee for the sole member of an OPC
5	Minimum requirement for formation	2 Shareholder 2 Directors Directors and Shareholders can be the same person	1 Shareholder 1 Director 1 Nominee of sole member Director and Shareholder can be the same person	2 Designated Partners who are individuals and at least 1 of them should be a resident in India. In case of an LLP in which – All the partners are body corporates ; or In which 1 or more 5partners are individuals and bodies corporate; At least 2 individuals who are partners of such LLP or nominees of such bodies corporate should act as designated partners
6	Maximum      number                      of Directors	15	15	No limit
7	Maximum      number                      of shareholders	A PLC can have a maximum of 200 shareholders or members	An OPC can have maximum of 1 member	A    LLP   can   have      unlimited number of partners

 
 

Sr. No.	Comparatives	Private Limited Company	One Person Company	Limited Liability Partnership
8	Minimum Capital	Rs. 1 Lac	Rs. 1 Lac	No limit
9	Member(s) Liability	Shareholders have limited liability and are liable only to the extent of their share capital	Director and Nominee Director have limited liability and are liable only to the extent of his/her share capital.	Partners have limited liability and are liable only to the extent of their contribution to the LLP and not for any independent/ unauthorised act of other partners
10	Alteration       of                       name, address, objects etc.	Filing required with RoC. Order of Tribunal or Central Government approval, as the case may be, is required	Filing required with RoC. Order of Tribunal or Central Government approval, as the case may be, is required	Application to be made to the RoC or may be directed by the Central Government in certain cases.
11	Closure/Dissolution/Wind ing up	Can be initiated Voluntarily, or By the Tribunal	Can be initiated Voluntarily, or By the Tribunal	Can be initiated- Voluntarily by the partners or; By the Tribunal
12	Transfer      of                   economic rights	Ownership can be transferred by way of share transfer.	Ownership                           can                           be transferred.	A partner’s economic rights (i.e. rights of a partner to a share of the profits and losses of the LLP and to receive distribution at the time of winding up) in the LLP shall be transferable. However, such a transfer shall not by itself cause the partner’s disassociation  or  a  dissolution

 
 

Sr. No.	Comparatives	Private Limited Company	One Person Company	Limited Liability Partnership
				and winding up of the LLP.   However, such transfer  shall not entitle the transferee or assignee to participate in the management or conduct of the LLP’s activities. Therefore, the transferee would not be deemed to be a ‘partner’ of the LLP just because a partner has transferred him the ‘economic rights’. For becoming a partner of LLP, the manner specified in the LLP Agreement or the provisions of the Act would have to be followed.
13	Existence or Survivability	Existence of PLC is not dependent on the directors or shareholder. Can be dissolved only voluntarily or by Regulatory Authorities.	Existence of an OPC is not dependent on the Director or Nominee Director. Could be dissolved only voluntarily or by Regulatory Authorities.	LLP can continue its existence irrespective of changes in partners.
14	Conversion	A PLC can be converted into OPC, subject to: Paid up share capital of Rs. 50 lakh or less and	OPC can be converted into PLC mandatorily , subject to: Paid up share capital more than Rs. 50 lakh or	Cannot be converted into a company.

 
 

Sr. No.	Comparatives	Private Limited Company	One Person Company	Limited Liability Partnership
		Average annual turnover of Rs. 2 crore or less during the preceding 3 FYs	Average annual turnover more than Rs.2 crore during preceding 3 FYs.
15	Maintenance of books of accounts	Mandatory	Mandatory	Have to maintain annual accounts reflecting true and fair view of its state of affairs. A “Statement of Accounts and Solvency” in prescribed form shall be filed by every LLP with the registrar every year
16	Maintenance of statutory records	Resolutions and Minutes of the Board and General Meetings Share              Register     and              Share Certificates	Resolutions and Minutes of the Board and General Meetings Share Register and Share Certificates	Minute book to be maintained to keep records of the partners’ meetings.
17	Acceptance    of                       deposits from Public	Provisions of Section 73 of the Companies Act, 2013 have  to be stringently abided.	Provisions of Section 73 of the Companies Act, 2013 have to be stringently abided.	There is no such provision in the LLP Act, 2008
18	Loan        to                Directors, etc./Partners	Provisions of Section 185of the Companies Act, 2013 have  to be strictly followed	Provisions of Section 185of the Companies Act, 2013 have to be strictly followed	There is no such provision in the LLP Act, 2008
19	Loan and investments by company	Strictly regulated by Section 186 of the Companies Act,2013	Strictly  regulated  by Section 186     of     the           Companies Act,2013	There is no such provision in the LLP Act, 2008

 
 

Sr. No.	Comparatives	Private Limited Company	One Person Company	Limited Liability Partnership
20	Board/Partners’ Meetings	1st meeting within 30 days from the date of incorporation. Minimum 4 Board Meetings in a calendar year and there should not be a gap of more than 120 days between 2 consecutive meetings.	No meeting required if there is only 1 Director. In care there are more than 1 Directors, 1st meeting to be held within 30 days from the date of incorporation At least 1 meeting has to be conducted in each half of the calendar year and the gap between the 2 meetings should not be less than 90 days.	No compulsory meeting is prescribed. However, meetings of the designated partners to be held as per the provisions of the LLP Agreement.
21	Statutory Audit	Mandatory	Mandatory	The accounts of every LLP shall be audited provided turnover is more than Rs. 40 lakhs or contribution of partners is more than Rs. 25 lakhs
22	Internal Audit	Provided – Turnover is Rs. 200 crore or more during the preceding FY; or Outstanding loans or borrowings from banks or public financial institutions exceed Rs.100 crore or more at any point of time during the preceding FY	Not Mandatory	Not Mandatory

 
 

Sr. No.	Comparatives	Private Limited Company	One Person Company	Limited Liability Partnership
23	Annual General Meetings (AGM)	Mandatory	No AGM is required	No AGM is required
24	Annual       Registrar                   of Company (RoC) filings	Balance Sheet, Profit and Loss Account, Cash Flow Statement, Statement of changes in equity and any explanatory notes with Form AOC-4 and consolidated Financial Statement , if any, with Form AOC- 4 CFS. These should be filed within 30 days of the date of AGM. Annual Returns in Form MGT 7	Balance Sheet, Profit and Loss Account, Statement of changes in equity and any explanatory notes with Form AOC-4     and               consolidated Financial Statement, if any, with Form AOC- 4 CFS. These should be filed within 30 days of the date of AGM. Annual               Returns               in               Form MGT 7	Statement of Accounts and Solvency in Form 8 within a period of 30 days from the end of 6 months of the Financial Year (FY) to which the above statements relate. Annual return in Form 11 within 60 days of closer of FY.
25	Tax Audit	Is required – If PLC is carrying on business, then if total sales, turnover or gross receipts (as the case may be) in business for the year exceed or exceeds Rs. 1 crore. If PLC is carrying on profession, if the gross receipts in profession for the year exceed Rs. 50 lakhs.	Is required – If OPC is carrying on business, then if total sales, turnover or gross receipts (as the case may be) in business for the year exceed or exceeds Rs. 1 crore. If OPC is carrying on profession, if the gross receipts in profession for the year exceed Rs. 50 lakhs.	Is required – If LLP is carrying on business, then if total sales, turnover or gross receipts (as the case may be) in business for the year exceed or exceeds Rs. 1 crore. If LLP is carrying on profession, if the gross receipts in profession for the year exceed Rs. 50 lakhs.

 
 

Sr. No.	Comparatives	Private Limited Company	One Person Company	Limited Liability Partnership
26	Taxation	Taxed at 25% plus surcharge and cess as applicable ( In case the turnover is upto 50 crore). Taxed at 30% plus cess (In case turnover is more than 50crores)	Taxed at 30% plus surcharge and cess as applicable.	Taxed at 30% plus surcharge and cess as applicable.
27	Annual Tax filings	Mandatory Tax Returns in Form ITR 6 Due date:31st October	Mandatory Tax Returns in Form ITR 6 Due date:31st October	Mandatory Tax Returns in Form ITR 5 If Audited: 31st October If not audited:31st August