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The basic difference between One Person Company and a Public Company is the limits of the minimum and a 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 number of owners or members.
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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,
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“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 :
- The person must be a natural person being an Indian Citizen and a resident in India can incorporate One person Company.
- One person can create only one such company or become a nominee of one such company.
- The purpose for which it is formed, should not be charitable.
- It must not include Non-Banking Financial Investment activities including investments in Securities of any body corporate.
- The paid-up share capital must not be more than Rs. 50 Lakhs.
- The average annual turnover of three years should not exceed Rs.2 crores.
- It must have at least one director but not more than 15 directors.
Some of the examples of Person Company :
- Durga Cotton Private Limited(OPC), Mumbai
- Rash Farm (OPC) Private Limited, Chhatisgarh
- Nature’s Nectar Wellness (OPC) Private Limited, Chennai.
Meaning of Public Company:
It is the one which:
- is not a private company
- has a minimum paid-up share capital as prescribed
- is a private company, having a public company as a holding company.
- It must have at least 7 members to incorporate a company.
- There is no restriction on the transfer of shares
- A prospectus is issued to invite the public to share capital subscriptions.
- It must have at least 3 directors but not more than 15.
- The shares can only be allotted if the minimum subscription has been received.
- It can invite and accept deposits from the public.
- The word ‘Limited’ is used as a part of its name.
Some of the examples:
- Indian Oil Corporation Limited
- Bharat Petroleum Corporation Limited
- Oil and Natural Gas Corporation Limited
- 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 Director 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 one owner so it is not possible to raise funds by issuing shares of the company. | For public companies, it is very easy to raise funds by issuing shares to the public in the share market. |
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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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