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Article Details
Private Limited Company, OPC and LLP – a comparison
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