Private Limited Company vs One Person Company

The company is a broad term, having varied structures, restrictions, rules and liabilities. It can be public limited, private limited, nidhi company, one person company etc. Among all, one person company is the most unheard of. Comparatively, it is a newer concept in India, but more common in other countries.

Private Limited Company (PLC): It requires minimum two members or shareholders to incorporate. The restriction on a maximum number of shareholders is 200. The shareholders can be persons or companies, including foreign companies. They are further categorised as Private Limited Company – Limited by Shares and Private Limited Company – Limited by guarantee.

One Person Company (OPC): It is mainly a sole proprietorship, having advantages of limited liability and corporatization. It opportune individual entrepreneurs, since OPC can be formed with just one Director and one member.

Private Limited Company and One Person Company are closely similar to each other, in terms of their structure, minimum member requirement, suffix mandates etc.

  1. Both are governed by Companies Act 2013.

  2. Both need to be registered under the Ministry of Corporate Affairs. In other words, ‘Certificate of Incorporation’ is a mandate to start a business.

  3. Both types of companies are separate legal entities. The individual owners, shareholders or members are not liable to pay debts or losses of the business through personal assets.

  4. Taxation rules on income generated from the business are same, as per the rates defined in the provisions of the Income Tax Act.

  5. An auditor is obligatory to be appointed within 30 days from the date of incorporation. This condition is irrespective of share capital or turnover of the company.

Having a base understanding of both the forms, here’s a detailed list of differences between the two:


Private Limited Company

One Person Company

Mandate suffix in company name

Private Limited

OPC Private Limited

Minimum paid-up capital required

There was a limit on minimum capital of Rs. 1,00,000. However, it has been relaxed in the Companies Amendment Act, 2015.

No necessary requirement on minimum capital. However, when minimum capital exceeds Rs. 50 Lakhs, it becomes a mandate to convert OPC to a PLC.

Minimum and maximum number of members


Minimum and maximum 1 member is allowed.

Minimum and maximum number of directors




A PLC is inconvertible to OPC.

An OPC can be converted to PLC if it meets any one of the following conditions:

1. It has completed two years after its incorporation.

2. Minimum paid-up capital has exceeded Rs. 50 lakhs.

3. Its turnover has exceeded the threshold limit.

Transferability of shares

Shares can be transferred easily with the consent of other shareholders.

Memorandum of Association needs to be altered to transfer shares.

Board meeting

It is a mandate to hold a quarterly board meeting. The maximum gap between two meetings can be 120 days.

It is a mandate to hold a biannual board meeting i.e. every 6 months. There must be at least 90 days between the two meetings. In case of one director, there is no compulsion of the board meeting.

Who should go for OPC registrations?

The OPC or the one person company is something that has come into the existence from 2013 by the act of government in reality. You are permitted to start your own company single-handedly. The single-handed decisions can be taken fast and will be implemented fast. The OPC can be converted to Private limited. All the regulations of Pvt Ltd are applicable to OPC. OPC has another meaning of processing control. It is one of the software that allows the software to connect with industrial hardware devices.OPC business has been introduced in India to praise and promote the single-handed business.

You can apply for the OPC

One can apply for the OPC. It is very helpful under the guidance of Government of India. It is new kind of business where a single entrepreneur can maintain corporate entity with limited accountability protection. There are companies who are offering the help to register for OPC.

OPC has advantages

Single promoter– It is nothing better than any good. You don’t have to take permission or discuss things before promoting your brand. The way and instructions will come only from you. You will be the sole owner and responsible person to extend your business. You will reap the fruit and get the benefits.

Uninterrupted existence-There are circumstances when the partner or co-owner died, leaving the company, try to harass the company policies, due to the mutual understanding or shareholder percentage. But the OPC will not break down until the single-handed owner wants it to be. It means once the company comes to the forefront, it will have an uninterrupted existence.

Easy transferability– during the time of any kind of crisis – the owner being one single user – can access the accounts and furthermore can transfer funds as per his or her needs. The easy transferability will help the business to get assistance from the Bank or other financial institutions. This is the best means via which one can get the independence of the same and often make the decision single handily and freshly.

Borrowing facility-You may need a lump sum amount. You have to apply for the loan. Your partners may defy or deny. But As an OPC, you are ok to get the money. In the time of borrowing, you will be able to communicate on your own and convince the person easily.

Owning property-You can buy property, land, intangible assets, machinery by the name of the OPC. It is like an artificial person. You can alienate, acquire, own or sell properties by the name of OPC. There will be no nominees.

Note few rules and regulations that are apt

  • One can well change the nominee by applying INC-4

  • The Simplified Proforma for Incorporating Company automatically will lodge the name within 20 days of the Running service.

You are doing business. You are running it for your good and to develop it to serve others too. OPC will help your dream to fulfil. This is the best and another alternative method of the company formation.