Private Limited Company vs LLP vs OPC vs Partnership vs Proprietorship
Private Limited Company:
Ownership: Private Limited Companies have a minimum of two shareholders and a maximum of 200 shareholders.
Liability: Shareholders have limited liability, and their personal assets are generally protected from business debts.
Legal Entity: Private Limited Companies are separate legal entities from their shareholders, providing continuity and ease of ownership transfer.
Compliance: Private Limited Companies have more extensive compliance requirements, including holding regular board meetings, filing annual financial statements, and maintaining proper accounting records.
Limited Liability Partnership (LLP):
Ownership: LLPs require a minimum of two partners, and there is no maximum limit.
Liability: Partners have limited liability, protecting their personal assets from the partnership's debts or liabilities.
Legal Entity: LLPs are separate legal entities, distinct from the partners. They can own property, enter into contracts, and sue or be sued in their own name.
Compliance: LLPs have fewer compliance requirements compared to Private Limited Companies. They need to file an annual return but are exempt from certain regulatory formalities.
One Person Company (OPC):
Ownership: OPCs are owned and controlled by a single individual.
Liability: The sole owner has limited liability, protecting their personal assets from business debts.
Legal Entity: OPCs are separate legal entities, providing legal recognition and continuity.
Compliance: OPCs have relatively fewer compliance requirements compared to other company types. They are exempt from certain regulatory formalities.
Ownership: Partnerships involve two or more individuals who jointly own and operate the business.
Liability: Partners have unlimited liability, making them personally liable for the partnership's debts and obligations.
Legal Entity: Partnerships are not separate legal entities. The partners and the business are considered the same entity.
Compliance: Partnerships have minimal compliance requirements. However, partnerships may need to adhere to specific registration and tax obligations.
Ownership: Proprietorship is a business structure where a single individual owns and operates the business.
Liability: The proprietor has unlimited liability, meaning they are personally responsible for all business debts and obligations.
Legal Entity: Proprietorship and the owner are not separate legal entities.
Compliance: Proprietorships have minimal compliance requirements compared to other structures. However, the owner may need to adhere to specific tax and licensing obligations.