OPC vs. Public Company

OPC (One Person Company) governed by companies act, 2013 having limited liability, managed single-handedly with the benefit of minimal compliances, easy transferability over public company.

 

Most of the businesses won’t survive for long if you are not choosing the right form of business. But when you are doing the right things which mean choosing the right business structure then you are probably doing the right things in other aspects of business too.

More choices are available to pick the best form of business entity for your business. But the availability of business venture depends on the number of owners. An individual owner may operate as One Person Company and if there are two or more owners of the business then other options are available to form.

 

One Person Company (OPC)

OPC popularly known as One Person Company incorporated as a private limited company. Like in a sole proprietorship, OPC restricts to have more than one shareholder and an invitation to the public. This hybrid form of business entity facilitates with the advantages of the sole proprietorship and limited company.

Public Company

A public company is the most common form of a business entity whose shares are publicly traded on the stock exchange. A public company can issue shares through an IPO (Initial Public Offering).

Difference between OPC and Public Company

Comparative analysis of One Person Company and Public Company:

Particulars

One Person Company

Public Company

Governing Body

OPC (One Person Company) is governed by the Companies Act, 2013.

Public companies are also governed by the Companies Act, 2013.

Name of the entity

A One Person Company must have the word ‘OPC’ in brackets at the end of the name of the company.

In public company the word ‘limited’ must be used as a suffix with the name of the company.

IPO

OPC restricts to issue its shares publicly.

A public company permits to issue share to the general public through an IPO (Initial Public Offer).

Number of members

An OPC can be incorporated with one person and restrict to have more than one shareholder.

Minimum- 7 members

Maximum- unlimited

Number of directors

Minimum one director should be appointed at the time of incorporation.

Minimum- 3 directors

Maximum- 15 directors

Number of directors can be further increased by passing the special resolution.

Transferable shares

Shares can be transferred only by way of altering the MOA (Memorandum of Association).

Shares can be freely transferable which means shares are bought and sold in stock exchange market.

Concept of nominee

It is compulsory to appoint a nominee whose name must be mentioned in MOA.

No such concept of nominee is there in a public company.

Auditor

The provision of mandatory rotation of auditor after the expiry of term is not applicable on OPC.

In public company the provision of mandatory rotation of auditor after the expiry of maximum term is applicable.

Control and management

The sole owner of the company has the complete control over the company.

But in case of a public company the directors don’t have the complete ownership of the company.

Foreign ownership

In OPC every owner/ director/ nominee should be a resident of India. Hence, no NRI or foreigner is allowed to invest in OPC.

In case of public company FDI (Foreign Direct Investment) is allowed.

 


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