PVT LTD vs LLP vs OPC

Private Limited Company (PVT LTD), One Person Company (OPC), Limited Liability Partnership (LLP) are the most preferable entities in India. Many people gets confused between OPC vs PVT LTD or PVT LTD vs LLP or OPC vs LLP. LLP or PVT LTD which is better is the major aspect of peoples. In this blog we have covered every aspect which will cover difference between PVT LTD and LLP or difference between PVT LTD and OPC and difference between all three entities.

Law and Authority:

• PVT LTD – The Companies Act, 2013 and the Ministry of Corporate Affairs.
• OPC – The Companies Act, 2013 and the Ministry of Corporate Affairs.
• LLP – The LLP Act, 2008 and the Ministry of Corporate Affairs.

Minimum Directors and Share holders:

• PVT LTD – 2 Shareholder, 2 Directors, Directors and Shareholders can be the same person.
• OPC – 1 Shareholder, 1 Director, and 1 Nominee of proposed Director, Director and Shareholder can be the same person.
• LLP – Designated Partners who are Individuals and at least 1 of them should be a resident in India.
  • In case of LLP in which –
    • All the partners are body corporates or
    • In which 1 or more 5 partners are individuals and bodies corporate;
    • At least 2 individuals who are partners of such LLP or nominees of such corporate bodies should act as designated partners.

Eligibility:

• PVT LTD – Any person may form a PVT LTD, at least one must be Indian resident.
• OPC – Only an Indian citizen and resident of India.
• LLP – Partners in LLP can be any individual and corporate body.

Maximum Directors:

• PVT LTD – 15
• OPC – 15
• LLP – No Limit

Maximum Shareholders:

• PVT LTD – 200
• OPC – 1
• LLP – No Limit

Minimum Authorised Capital:

• PVT LTD – 1 Lakh
• OPC – 1 Lakh
• LLP – No Limit

Directors / Partners Liability:

• PVT LTD – Shareholders liability is up to extent of their share capital.
• OPC – Directors liability is up to extent of his/her share capital.
• LLP – Partners have limited liability and liability is up to extent of their contribution to the LLP and not for any act of other partners.

Change in Name, Address or Objects:

• PVT LTD – Filing to be done with ROC.
• OPC – Filing to be done with ROC.
• LLP – Filing to be done with ROC.

Existence:

• PVT LTD – Existence of PVT LTD does not depend on the directors or shareholder. It can be dissolved only voluntarily or by MCA Authorities.
• OPC – Existence of an OPC does not depend on the Director or Nominee Director. It can be dissolved only voluntarily or by MCA Authorities.
• LLP – LLPs existence is not effectible Irrespective of changes in partners.

Transfer of Rights:

• PVT LTD – Transfer of shares is the only way to transfer Ownership.
• OPC – Ownership can be transferred.
• LLP – A partner’s economic rights in the LLP will be transferable.

Conversion:

• PVT LTD – PVT LTD can be converted into OPC, subject to:
  • Paid up share capital less than Rs. 50 lakhs
  • Annual turnover less than Rs. 2 crores during the previous 3 FYs
• OPC – OPC can be converted into PVT LTD anytime voluntarily and compulsory conversion requires, subject to:
  • Paid up share capital of Rs. 50 lakh or more
  • Annual turnover of Rs. 2 crore or more during the previous 3 FYs
• LLP – LLP can be converted into a company.

Investments and Loan by Company:

• PVT LTD – Section 186 of the Companies Act, 2013 have to strictly follow.
• OPC – Section 186 of the Companies Act, 2013 have to strictly follow.
• LLP – No such provision in the LLP Act, 2008.

Maintenance of Books of Accounts:

• PVT LTD – Mandatory
• OPC – Mandatory
• LLP – “Statement of Accounts and Solvency” in applicable form shall be filed by LLP with the registrar every year. LLP has to maintain annual Accounts indicating true and fair view of its position of affairs.

Maintenance of Statutory Records:

• PVT LTD – Resolutions, Minutes of the Board, General Meetings Share Register and Share Certificates.
• OPC – Resolutions, Minutes of the Board, General Meetings, Share Register and Share Certificates.
• LLP – In order to keep records of the partners’ meetings, Minute book to be maintained.

Deposits from Public:

• PVT LTD – Provisions of Section 73 of the Companies Act, 2013 have to be strictly follow.
• OPC – Provisions of Section 73 of the Companies Act, 2013 have to be strictly follow.
• LLP – No such provision in the LLP Act, 2008.

Loan to Directors/Partners:

• PVT LTD – Provisions of Section 185 of the Companies Act, 2013 have to be strictly followed.
• OPC – Provisions of Section 185 of the Companies Act, 2013 have to be strictly followed.
• LLP – No such provision in the LLP Act, 2008.

Board/Partner’s Meetings:

• PVT LTD – 1^st meeting within 30 days from the date of incorporation. Minimum 4 Board Meetings in a year and there should not be a difference of more than 120 days between 2 consecutive meetings.
• OPC – NA
• LLP – No compulsory meetings. Although, designated partners have to be held meetings as per the provisions of the LLP Agreement.

Statutory Audit:

• PVT LTD – Mandatory
• OPC – Mandatory
• LLP – The books of accounts of LLP shall be audited only if turnover is more than 40 lakhs or partner’s contribution exceeds 25 lakhs.

Internal Audit:

• PVT LTD – Only if –
  • Turnover is Rs. 200 crore or more during the previous FY; or
  • Outstanding loans or borrowings from banks or public financial institutions exceed Rs.100 crore or more at any point of time during the previous FY
• OPC – NA
• LLP – NA

Income Tax Audit:

• PVT LTD – For business, if total sales, turnover or gross receipts for the year exceeds Rs. 1 crore and for profession, if the gross receipts in profession for the year exceed Rs. 25 Lakhs.
• OPC – Same as PVT LTD.
• LLP – Same as PVT LTD

Annual Fillings:

• PVT LTD – Statutory Audited Statement, Statement of changes in equity with Form AOC-4 and consolidated Financial, if any, with Form AOC- 4 CFS. These should be filed within 30 days from the date of AGM.
  • Annual Returns in Form MGT 7 to be filed and for Small Companies and OPC MGT 7A has to file within 60 days from the date of AGM.
• OPC – Same as PVT LTD
• LLP – Statement of Accounts and Solvency in Form 8 within a period of 30 days from the end of 6 months of the financial year to which the above statements relate.
  • Annual return in Form 11 within 60 days of closer of FY.

Income Tax Rate:

• PVT LTD – 22% plus surcharge and cess as applicable.
• OPC – 22% plus surcharge and cess as applicable.
• LLP – 30% plus surcharge and cess as applicable.

Income Tax Return:

• PVT LTD – Mandatory (ITR in Form ITR 6)
• OPC – Mandatory (ITR in Form ITR 6)
• LLP – Mandatory (ITR in Form ITR 5)