5 Steps for private limited company registration

Difference between One Person Company and Private limited company registration

One Person Company and Private limited company registration are two different business registration structures. One Person Company is relatively new to India and getting some traction as it has some benefits over private limited company registration.

Private limited company registration has benefits like better brand image and limited liability i.e. personal wealth of individual can’t be used to pay the debts of a Private limited company. On the contrary, private limited companies have more compliance cost which impacts the profitability of the start-up.

Comparison for One Person Company and Private limited company registration:

	One Person Company	Private limited company
Shareholder	Single	Minimum: 2 Maximum: 200
Director	Minimum: 1 Maximum: 15	Minimum: 2 Maximum: 15
Liability	Limited	Limited
Tax Rate	25%	25%
Suitable for	Paid capital should be less than Rs. 50 lakhs and Turnover should be less than Rs. 2 crore	No condition
Company Name	Ends with (OPC) Pvt. Ltd./ (OPC) Ltd.	Ends with Pvt. Ltd.
AGM, Board Meeting	Exempted	Compulsory

There are a lot of characteristics which are same for One Person Company and Private limited company registration but in case you are an individual who wants to start a new business and get the benefit of Private limited company registration then you can go for one person company registration for initial years and later convert into Private limited company. In case, you are more than one individual then you can go for Private limited company registration.

There is a reduction in compliance cost in One Person companies but it won’t significantly differ to change decisions only the basis of compliance cost. Also, One Person companies enjoy less brand image as compared to private limited company registration. One needs to make proper trade-offs while making these decisions.

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Read more-Documents required for private limited company registration