If you are thinking to start a business, one of the most critical decision that you have to take is to choose the right type of company structure. There are two most common types of business entities in India which are One Person Company and the other one is Public Company. Both of these structures have distinct advantages, features and limitations. Let’s understand both the structures and dive into the key differences between OPC and Public Companies.  

Definition and Ownership

One Person Company (OPC): 

One Person Private Limited Company is a type of company structure that can be formed by a single person. It allows that person to enjoy all the benefits of limited liability while having full control over the company. This structure is great for solo entrepreneurs who want limited liabilities without any complexity of a larger corporate structure.

Public Company: 

Public Company’s shares are traded among the public stock exchange. This structure can be formed by multiple shareholders and it can also raise capital by issuing their shares to the public. These structures are typically large entities with substantial capital and operations.    

Minimum Requirements

OPC:

- Minimum Members: OPC is generally formed by 1 person and the maximum number of people in this company can be 15.

- Directors: One director is needed, but if the OPC has more than one member there must be another director.

- Capital Requirements: To form One Person Private Limited Company Registration there is no minimum requirement of capital.

Public Company:

- Minimum Members: To form Online Public Limited Company Registration, the minimum number of people required are 7 with no maximum limit of members. 

- Directors: There must be at least 3 directors in the Public Company.

- Capital Requirements: Public Company needs a minimum paid-up capital, which varies by jurisdiction.

Share Transfer and Ownership

OPC:

Share Transfer: In an OPC the shares cannot be transferred or sold to the public. The ownership of the company will remain to the with the sole proprietor only. Under any circumstance the shares can only be transferred to the nominee director.   

Public Company:

Share Transfer: In a public company the shares are freely transferrable and can also be traded on the stock exchange. This liquidity provides flexibility for shareholders and it also can help in attracting a wide range of investors.  

Compliance and Reporting

OPC:

- Compliance: As compared to the Public Limited Company Registration, OPCs have simpler compliance. Under this structure you have to follow some basic statutory regulations but don’t have any obligation from the stringent requirements imposed on public companies

Public Company:

- Compliance: Public companies have to follow strict rules and regulations to operate. They have to met regulatory standards and corporate govt. practices which includes stock exchanges and securities regulators.