What is the difference between Pvt Ltd and One Person Company?

One Person Company is typically regarded as a company, that is typically incorporated by a solo member. This also signifies that this variety of business corporations is applicable for registration, even when there is only one sole member or shareholder. On the contrary, a Private Limited Company generally refers to a private business entity, typically owned by private stakeholders. A Private Limited Company is generally recognized by the legal abbreviation “Ltd”, which comes at the last of its brand name. 

Who can start a One Person Company?

One Person Company can be incorporated by one director and one single member as per the Companies Act, 2013, where both the director and member can also be the same person. Additionally, the member does not have to be mandatorily a resident of India, the director as well as a member of the company might not be a resident of India. 

Who can start a Private Limited Company?

The incorporation of a Private Limited Company typically requires certain prerequisites, which entail a minimum requirement of 2 directors and 2 shareholders. The directors of the Private Limited Company also need to possess the Directors Identification Number (DIN). 

What is the tax rate for OPC (One Person Company)?

You might be wondering, whether forming a One Person Company can let you enjoy certain tax advantages. Let me tell you that there are no certain tax advantages in forming a One Person Company and the business owners need to pay taxes at a flat rate of about 30%. 

What is the tax rate for PLC (Private Limited Company)?

There are two major criteria regarding the tax rate of the Private Limited Company - tax rate under an annual turnover of Rs. 400 crores and the tax rate above the annual turnover of Rs. 400 crores. When the annual turnover of the Private Limited Company is under Rs. 400 crores then 25% of tax is generally charged on the profits. On the other hand, if the annual turnover exceeds Rs. 400 crores, then the company has to pay 30% tax on their earned profits. 

Now, you might have a common question about which is the best variety of business company among the One Person Company and the Private Limited Company. 

What are the risks of a One Person Company?

The major advantage that an individual enjoys while operating a One Person Company is that an individual can gain proper control over business operation. However, operating a One one-person company might also entail certain risks from the perspective of business existence. 

• You do not get any legal separation while operating the one person company 

• It becomes relatively hard to raise capital while operating a One Person Company

• Individuals typically gain access to a limited amount of resources leading to a limited scope of business expansion along with unlimited liability. 

What are the risks of a Private Limited Company?

While operating a Private Limited Company, the business owners often acquire several benefits in terms of business expansion. On the other hand, the operation of the Private Limited Company also possesses certain business risks: 

• Private Limited Companies often enjoy limited access to the capital markets. 

• Business owners often have to go through a lot of paperwork in due course of the registration processes of a Private Limited Company. 

Which is better OPC or PLC?

It can be concluded that both the form of company has its own advantages as well as limitations. So, you need to assess among the One Person Company and Private Limited Company as per your prevailing conditions. 

If you are among those who require quality assistance with company registration processes, then Oneclickbusinesssolutions is the right option for you. 

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