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Private Limited Company v/s LLP v/s OPC

April 13, 2017

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Private Limited Company, LLP and OPC — Private Limited Company v/s LLP v/s OPC

Private Limited Company v/s LLP v/s OPC

The difference between Private limited company v/s LLP v/s OPC rentiation among private limited company, limited liability partnership and one person’s company is based on the various features. Private limited company should be considered for business raising funds, requires greater compliance, with few of tax advantages. In LLP it is for non-scalable businesses with fewer compliance and tax advantages. And in OPC it is for sole entrepreneur who requires the higher compliance with minimal tax advantages and starup costs.

Those differentiations are important for the business in India. As they all are somehow interlinked with each other, but the difference among them can be made upon the various features.

Initially, the private limited company and OPC are governed by Companies Act 2013 but LLP is governed by Limited Liability Act 2008. They all are the separate legal entity, but their capital contribution is different. The capital contribution is minimum Rs. 1 lakh and for OPC too, but there is no prescribed limit for LLP.

Number of Directors

The number of Directors among private limited company is minimum 2 Directors, one has to be resident, in case of LLP, they also have 2 designated partners, one has to be resident but in OPC, there is only 1 resident director.When it comes for the audit among all these, it is compulsory in private limited company and OPC, but in case of LLP, no annual audit if turnover is less than 40 lakhs and the capital contribution is less than 25 lakhs. But they all have the limited liability.

With regard to conversion, private limited company can be converted into public liability company and LLP but LLP can’t be converted into OPC, and private limited company lastly OPC can be converted into public liability company and private limited company.

Another differentiation among all those is with the foreign ownership. In private limited company it is allowed but in LLP ownership can be allowed but with due permission from reserve bank of India and foreign investment department and similarly in OPC too.

Now another concept is with the taxation, in private limited company, LLP and OPC the tax rate is 30% on profit plus cess and surcharge. And with the annual filing in private limited company and LLP income tax return and annual statement of accounts and return is required to be filled with registrar of the company. In OPC one person is required to file its income tax return and annual statements of accounts with the registrar.

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