What Are the Differences Between an OPC and a Private Limited Company?

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Are you considering to start a business, but you’re unsure about your funding situation and whether you’ll be able to cover all of the startup costs by yourself or not? You could be unsure of whether to choose a private limited company or an one person company registration. This blog will clear your choices.

Table of Difference Between private limited company & OPC registration:

Basis of DifferenceOne Person Company (OPC)Private Limited Company (Pvt Ltd)
  MeaningA One Person Company combines the sole proprietorship and company business structures. The idea opened up opulent possibilities for sole proprietors and other independent business owners who can benefit from Limited liability and corporatization.A Private Limited Corporation is a separate legal entity from its Directors or Shareholders. A pvt ltd company must have at least two shareholders in order to be incorporated.
Number of Owner/ Members  It has only 1 owner.It has a minimum of 2 owners or members and a maximum of 200.
  Share Capital  Share capital and Share of profit are held 100% right by one person.Rights of share capital and profits are distributed among all owners/members as per the article of association. (AOA)
  Transfer of Share    Not ApplicableAs per the terms and conditions decided in the article of association many types of limitations are imposed by the AOA.
Share ProspectusNot ApplicableNo need to issue Prospectus.
  Number of DirectorsIt must have at least 1 Directors and it can have a maximum of 15 Numbers of Directors.It must have at least 2 Directors and it can have a maximum of 15 Numbers of Directors.
Name of CompanyThe word ‘OPC’ is used as part of the name of the company.The word ‘Private Limited’ is used as part of the name of the company.
  Funds RaisingIt has on one owner so it is not possible to raise funds by issue of shares of the company.With the agreement of all the company’s shareholders, shares of the company may be issued in order to raise money.
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Points of Differences Between Private Limited and one person company registration

1. Ownership and Regulation:

The employees’ ownership of a company is indicated by their shareholdings. In the case of one person company registration, ownership is held by a single member and is not shared with any other party. A member who owns 100% of the business is independent and has the flexibility to do whatever they want, as long as they abide by all applicable rules and regulations. He can simultaneously become a shareholder and a director and seize total authority, which is not feasible in the case of a private company. The Private Corporation always has at least two members with equal ownership. As a result, decision-making freedom is constrained and dependent. The directors chosen by the shareholders make all managerial decisions. The percentage of shares that each member owns determines their voting power.

2. Activities in OPC & Pvt. Ltd. Company:

The one-person company registration is not allowed for a specific set of authorized business activities. No OPC as an organization may engage in activities like non-banking financial activities, investing in securities, etc. Private Companies are permitted to engage in these types of operations with the prior consent of the relevant rules.

3. Taxability:

Since the OPC idea is not recognized by the IT Act, such businesses will be treated similarly to other businesses for taxes purposes. Private businesses are subject to a 30% tax rate on their whole income, minus cess and surcharges. Small businesses, however, are subject to the 25% tax rate on all income.

4. Company’s establishment & registration

One Person Companies and Private Companies both have the same costs associated with their formation, however, the costs associated with compliance are somewhat different. In OPC, the cost of compliance is lower than in private companies as it has a long procedure for registration. Each form must be filed, which costs INR 500, reflecting the greater OPC compliance cost. Compared to an OPC, a private limited company has higher compliance costs because of more documentation and paperwork.

5. Audit & Yearly Compliance:

Any business registered under the 2013 Indian Companies Act must undergo an audit. The Yearly Compliance portion is the same. Within 30 days of registration, both OPC and Private Companies must select a statutory auditor. Forms must be filed annually with the Ministry of Corporate Affairs as part of the Annual Compliance. Both must also submit income tax returns for each fiscal year.

6. Investment By The NRI Or Foreign National

Foreign nationals and NRIs can easily establish a private limited business in India, which is one of its biggest benefits. Private Limited Companies can take FDI via the automatic approval procedure. However, under the OPC, only Indian citizens are permitted to form a firm. One-person businesses can no longer accept and receive foreign direct investment.

Related Blog: How to Register a Company in India in 2023 – CAonWeb

7. Additional Compliance: 

In comparison to a Private Limited Corporation, OPC is exempt from several regulations, including those for AGMs and Board Meetings. The meetings do not need to be held like those of a private firm because there is only one member and one director. Whereas the Private Company itself benefits from a number of exemptions, OPC is given greater privileges.

8. Conversion of OPC: 

In the case of a one-person company registration, there is a restriction on corporate expansion. 

OPC must become a private or public company if its paid-up capital surpasses INR 50 Lakh or its annual average revenue exceeds INR 2 Crore.
 As a result, this is the upper maximum allowed for operation under the OPC. There are no restrictions or limitations in the case of a private company. Also, a minimum of two years must have passed since the one-person company’s registration if the promoter wants to voluntarily convert the OPC into another company.

Reasons why choose private limited company registration Over OPC Company

We will focus on why private limited company registration is a better choice than OPC.

  1. Separate legal entity: A private limited company is a separate legal entity from its shareholders. This means the company can own assets, sue and be sued in its name, and enter into contracts. In contrast, an OPC has no separate legal entity, and the sole proprietor is responsible for all the obligations and debts of the business.
  2. Liability protection: As a shareholder in a private limited company registration, your liability is limited to the amount you have invested in the company. So, if the company faces financial difficulties, your personal assets are protected. This is not the case with an opc registration, where the owner’s personal assets could be at risk.
  3. Greater funding opportunities: Private limited companies are more attractive to investors and banks, as they have a better capacity to raise capital than opc registration. This allows companies to grow faster and expand their operations.
  4. Perpetual succession: In a private limited company, the death or departure of a shareholder does not affect the existence or ownership of the company. However, in an OPC, the proprietorship ends with the death or insolvency of the sole member.
  5. Better credibility and recognition: Private limited companies are more credible and have better recognition compared to OPCs. This makes it easier for companies to do business with vendors, customers, and other stakeholders.

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OPC registration fees

The OPC registration fees in India vary depending on the services provided by the Chartered Accountant (CA) firm. Typically, the fees charged by CA firms for OPC registration range from Rs. 7,000 to Rs. 15,000, which includes government fees as well. However, the OPC registration fees may change depending on the following factors Legal structure, Professional fees, Turnaround time, and Additional services such as document drafting, name search, etc. can also increase the overall cost.

Private limited company registration fees

Overall, the total private limited company registration fees can range from Rs. 15,000 to Rs. 1 lakh or more, depending on the aforementioned factors. It is recommended to consult with a CA firm for an accurate estimate, as they can provide tailored services according to the specific requirements of the business like government fees, professional fees etc. The CA firm may also charge for additional services like obtaining Digital Signature Certificates (DSC), Director Identification Numbers (DIN), and other necessary licenses or permits, as required by the company.
With the assistance of Mr Sanket Agarwal you can easily able to choose between both types of registration, they have helped 1000 plus companies worldwide like India, Dubai, Hong Kong etc. Caonweb are offering the best online ca services.


Frequently Asked Question

Q.) Is OPC like a private company?

If an OPC’s average annual revenue over the 3 most recent financial years exceeded 2 crore rupees or its paid-up share capital exceeded 50 rupees. Then OPC is required to transform into a private or public company.

Q.) Can an OPC corporation employ people?

They are permitted to hire as many people as necessary. There can only be one stakeholder at a time. There may be multiple directors and staff in an OPC.

Q.) What is a Pvt Ltd company’s required minimum annual turnover?

Unlike to a one-person firm, a private limited company structure has no restrictions on capital and turnover.

Q.) Which business cannot be transformed into an OPC?

The formation or transfer of One Person or Company is restricted by Section 8 of the Act. OPC cannot acquire securities from other Body Corporates or indulge in other non-banking financial investment activities.


Company Registration

How to Register a Company in India?

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Company registration in India has now become very easy and convenient. Just need to follow the 4 simple steps:

1- Acquire your Digital Signature Certificate(DSC) within the stipulated time.
2- Get your Director Identification Number (DIN) at the earliest.
3- Register your entity on the MCA Portal as New user registration.
4- Get the Certificate of Incorporation delivered at your doorstep.

With this, we have tried to cover all the basics of how to register a company.
If you still need any assistance on company registration, don’t stress over it, and let our team of experts guide you.  

Company Incorporation

MCA Introduces New Company Incorporation E-Form Spice+

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To improve the ease of doing business in India, Ministry of corporate affairs (MCA) has recently come out with a new and updated version of SPICe form viz. SPICe+ (SPICe plus form). This new MCA form will help the new companies by making the complete process of company registration easy & convenient for them.

SPICe+ will be applicable from 15th February 2020.

How Spice+ Is Different From The Older Version?

SPICe+ offers a bucket of 10 services with an integration of 3 central government ministries & departments viz. Ministry of corporate affairs (MCA), Ministry of Labour & Ministry of finance and Government of Maharashtra. It helps in limiting the procedural constraints for company registration in India and ultimately saving onto time & cost involved in new company registration. SPICe plus form also helps in ease of doing business in India

Features of SPICe+

1.    Integrated web form.

2.     SPICe+ form is divided in two parts viz. Part-A & Part-B.

3.     Part-A: Reservation of Name (for new companies)

4.     Part-B: offering multiple Services such as:-

  • Company incorporation
  • Director identification number (DIN)
  • Tax deduction/collection account number (TAN)
  • Permanent account number (PAN)
  • Employee provident fund organization (EPFO) Registration
  • Employee state insurance corporation (ESIC) Registration
  • Professional tax registration (Maharashtra)
  • Compulsory opening of the company’s bank account
  • GST Identification Number (GSTIN)

5.  Users have the complete liberty of filling Part-A first, reserve the name for their company and complete Part-B afterward OR user can file Part-A & B together at one go for new company registration.

6. Under SPICe+, a new User-friendly dashboard is created for the convenience of the users.

7.  A new Reserve unique name (RUN) service option will be applicable from 15th February 2020 (Only for existing company)

8. On-screen filing and real-time data for new company registration

9. Information entered is saved and can be modified in the future (in case of error).

10. Once SPICe+ the form is filled online, it has to be converted into PDF for affixing Digital signature certificate (DSC).

11. Digitally the signed application must be uploaded back on the portal, with the linked forms.

Read other Blog: Steps for starting a business in India?


Q      What is SPICe+ or SPICe plus?

Ans. SPICe+ (Simplified proforma for incorporating a company electronically) is a comprehensive & integrated web form, which is a new initiative by the MCA, Government of India for ease of doing business in India.

Q      Who can file SPICe+ form?

Ans.  Following types of companies need to fill SPICe plus form before new company registration:

  • Private limited company
  • Public limited company
  • One person company
  • Section (8) companies
  •  Any other company

Q      When one should file SPICe+ form?

Ans. One must file SPICe+ form before company incorporation and it is applicable from 15th February 2020.

startup registrations

Top 5 Reasons Why You Should Register Your Company

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How can one own a business which does not legally exist, that’s where this article will help you as it answers the most vital question: Why you should register your Company. In the initial stage entrepreneurs focus on the development of their unique product/ service that they intend to offer, but market research has proven that registering the Company is a necessity and not an option as it is the determining factor in the success of any business. It is advisable to register your Company keeping in mind the following factors: 

  • Establish a presence:

In a competitive market like India, establishing a Company’s presence can be a big challenge. Due to an increased number of startup registrations, it is very important to register your Company. Company registration gives a unique identity to the business. Once a new company registration is done no other company can be registered with the same name all over India, hence it gives establishes a presence and gives a unique identity to the business. New company registration also adds to the credibility of the Company.

  • Banking operations:

To operate any business irrespective of its scale of operations one requires a current account to separate personal and business finances. To open the bank account registration documents, certificates, etc. need to be attached with the application which are further cross verified by the bank. Similarly for getting loans the banks have a lengthy documentation procedure which can only be fulfilled if the company is registered and compliant. For a registered Company there is an increased access to funding sources as it is highly preferred by investors.

Also Read this blog: What is a Sec 8 company under Companies Act, 2013 with basic key points

  •  Limited Liability:

The biggest reason why people opt for company incorporation is limited liability. As the company is treated as a separate legal entity, the Company protects its owners from personal liability. This means that if the company is sued, or incurs penalties, debt its members are not liable to satisfy the claims with their personal assets. The owners/ shareholders/ promoters are only liable upto the amount invested in the company, therefore the company provides limited liability as it has a separate identity.

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  • Makes you look serious and contract ready:

Once you enter the market with a registered business it adds to the brand building of the new company registration. It also increases the chances of getting contract as the documentation and registration is complete, and enables discounts in case of suppliers, as everyone prefers to do business with a registered Company. Even for applying for tenders one needs to have a registered entity whether its government tenders or commercial tenders.


  • Perpetual Succession:

Any change in the ownership of the Company does not affect the status of the Company. The Company goes on irrespective of its owners/ promoters/ shareholders. Even death, insolvency, insanity of any member of the Company does not affect its continuity. New Company registration is an asset for the owners, it can be passed down, sold, transferred for running the business.

Company registration is a big step and brings with it a lot of compliances, and filing obligations but at the same time it offers huge benefits which are incomparable.

Get  Import Export Code Online on lowest cost.

Company incorporation

What is a Sec 8 company under Companies Act, 2013 with basic key points

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Sections (8) of companies act, 2013 deals with the formulation of companies with charitable objects such as promotion of art, science, commerce, sports, education, research, welfare, without adding the words “limited” or “private limited” to the name of the new company registered.

1. The satisfaction of central government is necessary, that a person proposed to be registered as limited liability Company (LLC) under this act.

  • Includes the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment etc.
  • The profits or income of new company registered will be used for promoting objects of company.
  • The Central Government may issue license on such condition as it deems fit; allow it to be registered as a limited company.

2. Company incorporation shall enjoy the privileges and are subject to all the obligations of limited companies.

3. A firm can become a member of the new company registered.

(i) Once the new company registered under this act; are not liable to alter the memorandum or articles without prior permission of central government.

(ii) Conversion into some other form of company incorporation is only possible after complying with such conditions as prescribed from time to time.

4. Revocation of licence: Central government may revoke the licence if the company contradicts with any of the requirements mentioned under this section or in a manner violative of objectives of the company or prejudicial to the public interest, direct the new company registered to convert its status & change its name.

5. Subsequently, when the licence is revoked and the Central Government is satisfied that it is essential in the public interest that the new company registered should be amalgamated/wound up with another company incorporation under this, then the Central Government may provide for such amalgamation to form a single company with such features as prescribed by the government in the order.

{Note: Reasonable opportunity of being heard must be given}

6. Winding up/Dissolution of a company registered under section (8) companies act, can be transferred to another company registered under this section subject to certain conditions as the Tribunal may impose, or maybe sold and proceeds will be credited to the Rehabilitation and Insolvency Fund formed under section 269.

7. Amalgamation between companies could be done only if both are registered under the same section of the act, having similar objects.

8. Any default in complying with the requirements specified under this section, be punishable with a fine which shall not be less than 10 lakh rupees extending up to 1 crore rupees and the directors/officers of the company who found guilty shall be punishable with imprisonment for a term which may extend to 3 years or fine not be less than INR 25,000 extending to INR 25 lakh or both.



Several new features were introduced in the Companies act, 2013 which makes it unique from the companies act, 1956. Some features are discussed below:


(i) One Person Company incorporation: Companies act, 2013 brings relief for the new generation entrepreneurs who are not willing to share the stake in their company with anyone. Now an individual can form a single person company which was not possible earlier. Now the foreign investor can also set up wholly-owned private subsidiary in India. Hence it will promote foreign investment in India.

(ii) Small Company incorporation: Companies other than the public company having a paid-up share capital of not more than 50 lakh & turnover does not exceed 2 crores.

{Note: This will not apply to holding/subsidiary, companies registered under section (8) of companies act, 2013 or any company formed under special act}

(iii) Dormant Company incorporation: Earlier dormant company was tagged with a sign of caution, but this situation has done away with in company act, 2013. Now a dormant company can be formed for holding assets or intellectual property subject to the company not having any significant transactions.

(iv) Associate Company incorporation: A company having “significant influence” on the other without being a subsidiary/holding company. Here the term “significant influence” can be termed as a company having a stake of at least 20% or more.

(v) Private Company incorporation: Total number of shareholders in a private company has been increased from 50 to 200.


Previous companies act, 1956 requires the object clause to be classified into 3 categories viz. The main object, Ancillary object & other objects; reason for such condition was to restrict the company from commencing any other business. However, such a requirement has been done away with by coming of companies act, 2013.

Know about Section 8 Company Registration


“Promoter was nowhere mentioned in the previous companies act. However, it was extensively used under the Companies act, 2013. A promoter is a person who is named such under any annual return.


Under the new companies act, there is no buyback of securities within one year from date of closure of the previous buyback. This period is termed as “cooling off period”. Further, if a company is a defaulter (loan), then the company incorporation shall compulsorily have to wait for 3 years after repaying the entire outstanding amount.



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Private Limited Company registration is the most popular business entity among businessmen in India, it suits all kinds of industries whether small, medium, or large businesses. According to the data reports on the Ministry of Corporate Affairs website around 10,000+ companies are incorporated every month. A private limited Company as the name suggests is a closely held Company which limits the shareholder’s liability to the extent of the contribution made by them, providing the owners:

  • A Legal Entity
  • Perpetual succession
  • Limited risk
  • Dynamic

GSt Registration

Seeing the popularity of Private Limited Company Registration we have summed the whole process in four simple steps:


The first and foremost step is to obtain the digital signature certificates for the proposed directors and subscribers. DSC’s are required for filing e-forms on the MCA portal. There are government specified certifying authorities who can issue DSC’s. DSC’s are tokens with a validity of 1-3 years. The promoters/directors/subscribers need to get their mobile, email and video verification done to procure their Digital signature Certificates. The application and verification process takes around two working days.


The second step being name approval, the proposed name of the Company needs to be filed using the RUN form. The reserve unique name facility is provided by the Ministry of Corporate Affairs under the ease of doing business initiative. It’s a web form which is available for new and existing Companies. The form requires two names in the order of preference along with a brief regarding the business of the Company.  Name Approval is done within 24 hours and the name so approved is reserved for 20 days, once the period has lapsed a fresh application is required.


Once the name of the Company is approved, the application for the incorporation certificate needs to be filed. The Ministry of Corporate Affairs has provided a comprehensive form i.e. SPICE, Simplified Proforma for Incorporating a Company Electronically, through which one can apply for allotment of DIN, name reservation, incorporation certificate, PAN and TAN application in the same form. The SPICE form needs to be submitted along with the SPICE-form MOA (Memorandum of Association) and SPICE-form AOA (Article of Association) by paying the requisite fee and the stamp duty of the concerned state.


Every Company having a share capital incorporated after 2nd November, 2018, needs to file a declaration needs to be filed in form 20A to be issued by the directors within 180 days of Company Incorporation in India stating that the subscribers to the Memorandum of the Company have paid the value of the shares with a proof of subscription money received. The company can start operations only once the commencement of the business form has been filed.

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-How much does it cost to register a company in India?

With the ease of doing business initiative by the government of India, the cost of Company registration has marginally been reduced. Once can expect the charges around 3000-6000 per registration, which may differ from state to state.

-How long does it take to register a company in India?

The whole Company registration process is online, it generally takes around 5-7 working days to incorporate the Company as there are a few verifications and validations required by the client.

-What documents are required to register a company in India?

Documents required for proposed Director:

1) ID Proof ( PAN Card)

2) Address Proof 1 Adhaar/Voter ID/Passport/Driving License (Any one)

3) Address Proof 2 Electricity Bill/Telephone Bill/Bank Statement(Any one)

4) Photograph

Documents for proposed office address of the Company:

1) Electricity Bill (latest)

2) Rent Agreement of premises

3) No Objection Certificate

-Can I start a business without registering it in India?

It is not advisable to start a business without any registration. In India there are various kinds of business structures varying from simplest form to the complex ones. You can refer to our blog –How to choose the right business structure for your business? and choose one according to your needs.

-How can I start a Pvt Ltd Company in India?

To register a private limited Company in India one needs to follow the above mentioned procedure or take the help of ca services. For detailed information visit our knowledge corner by clicking on the below mentioned link: https://blog.caonweb.com/ (Search & find related topic).