Difference between One Person Company and Public Company

Difference between One Person Company and Public Company

The basic difference between One Person Company and a Public Company is the limits of minimum and the maximum number of owners/members in the company. In the type of One person company, there is always only one owner but the private company has a minimum of 2 and no limit on the maximum numbers of owners or members. 

To know the difference between these two, we must clear the meaning of these terms and explained as follows: –

Meaning of One Person Company:

It refers to the form of a company in which the only single person is the owner/ member of the company.

Section 2(62) of the Companies Act, 2013 defines One Person Company as,

“One person Company means a company which has only one person as a member.”

Characteristics of One person Company as per Rule 3 of Companies (Incorporation) Rules, 2014

  1. The person must be a natural person being an Indian Citizen and resident in India can incorporate One person Company.
  2.  One person can create only one such company or become a nominee of one such company.
  3. The purpose for which it is formed, should not be charitable.
  4. It must not include Non-Banking Financial Investment activities including investments in Securities of any body corporate.
  5. The paid-up share capital must not be more than Rs. 50 Lakhs.
  6. The average annual turnover of three years should not exceed Rs.2 crores.
  7. It must have at least one director but not more than 15 directors.

Some of the examples of One Person Company  :

  1. Durga Cotton Private Limited(OPC), Mumbai
  2. Rash Farm (OPC) Private Limited, Chhatisgarh
  3. Nature’s Nectar Wellness (OPC) Private Limited, Chennai.

Meaning of Public Company:

It is the one which:

  1. is not a private company
  2. has a minimum paid-up share capital as prescribed 
  3. is a private company, having a public company as a holding company.
  4. It must have at least 7 members to incorporate a company.
  5. There is no restriction on the transfer of shares 
  6. A prospectus is issued to invite the public to share capital subscription.
  7. It must have at least 3 directors but not more than 15.
  8. The shares can only be allotted if the minimum subscription has been received.
  9. It can invite and accept deposits from the public.
  10. The word ‘Limited’ is used as a part of its name.

Some of the examples:

  1. Indian Oil Corporation Limited
  2. Bharat Petroleum Corporation Limited
  3. Oil and Natural Gas Corporation Limited
  4. State Bank Of India

Chart of Difference Between One Person Company and Public Company: –

Basis of Difference

One Person Company

Public Company

Meaning It refers to the form of a company in which the only single person is the owner/ member of the company. A Public company is the one that is registered in the share market of the country to issue shares for the public to subscribe to them. 
Number of Owner/ Members It has only 1 owner.  It has a minimum of  7 and no maximum limit on the number of owners/ members. 
Share Capital  100% right is held by one person on the share capital and share of profit.  Rights of share capital and profits are distributed among all owners/members are per article of association and the number of shares owned by one person. 
Transfer of Share  Not Applicable  Owners/Members are free to transfer their share to the other person in the market.
Share Prospectus  Not Applicable  The prospectus must be issued to invite the public to subscribe to shares of the company. 
Number of Directors It must have at least 1 Directors and it can have a maximum of 15 Numbers of Directors.  It must have at least 3 Directors and it can have a maximum of 15 Numbers of Directors. 
Name of Company The word ‘OPC’ is used as part of the name of the company. The word ‘Limited’ is used as part of the name of the company.
Funds Raising
It has on one owner so it is not possible to raise funds by issuing shared of the company. Public companies, it is very easy to raise funds by issuing shares to the public in the share market.


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Difference between Partnership and Company

 

Conclusion:

Thus, both types of businesses are very different from each other one type i.e. Public Company has a lot of or uncountable numbers of the owner, and another type i.e. The one-person company has only one owner.

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