{"id":50687,"date":"2022-11-15T14:43:28","date_gmt":"2022-11-15T09:13:28","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=50687"},"modified":"2025-01-23T17:55:47","modified_gmt":"2025-01-23T12:25:47","slug":"difference-between-one-person-company-and-public-company","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/difference-between-one-person-company-and-public-company\/","title":{"rendered":"What is the Difference Between One Person Company and Public Company?"},"content":{"rendered":"\n<p>The working and functioning of businesses in India are governed by the Companies Act 2013. The regulators have set up distinct rules for One Person Company and Public Company, based on various factors such as ownership rights, transferability rights, Membership rights and so on. The difference between both them can be understood in detail below. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/difference-between-one-person-company-and-public-company\/#Overview_of_Companies_formed_under_the_Companies_Act_2013\" >Overview of Companies formed under the Companies Act, 2013<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/difference-between-one-person-company-and-public-company\/#Characteristics_of_One_Person_Company\" >Characteristics of One Person Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/difference-between-one-person-company-and-public-company\/#Characteristics_of_a_Public_Company\" >Characteristics of a Public Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/difference-between-one-person-company-and-public-company\/#Difference_between_One_Person_Company_and_Public_Company\" >Difference between One Person Company and Public Company&nbsp;&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/difference-between-one-person-company-and-public-company\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Overview_of_Companies_formed_under_the_Companies_Act_2013\"><\/span><strong>Overview of Companies formed under the Companies Act, 2013 <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Companies\nAct of 2013 divides businesses into various types based on their\ncharacteristics and functioning. Section 2(20) of the <strong>Companies Act, 2013<\/strong><sup><a class=\"text-primary\" href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/acts-rules\/companies-act\/companies-act-2013.html\"><strong>[1]<\/strong><\/a><\/sup> divides the word\n&#8220;Company&#8221; as Any company which is incorporated under the Companies\nAct 2013 or under any previous acts of company law. It also defines the\nformation of One Person Company and a Public Company<strong>. <\/strong><\/p>\n\n\n\n<p>Section 3 of the\nCompanies Act 2013 explains the formation of companies. According to this, a\ncompany can be formed for any lawful purpose by the following people-<\/p>\n\n\n\n<ul>\n<li>Seven or more persons can form a company, which can be called a public company.<\/li>\n\n\n\n<li>A company can be formed by two or more persons, and it can be called a <strong><a href=\"https:\/\/corpbiz.io\/company-registration\" title=\"Private Limited Company Registration\">private company<\/a><\/strong>.<\/li>\n\n\n\n<li>A company can also be formed by one person, which can also be called a private\/one-person company.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Characteristics_of_One_Person_Company\"><\/span><strong>Characteristics of One Person Company<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A one-person\ncompany or OPC may be defined as a company that has only one member, as defined\nin section 2(62) of the Companies Act, 2013. One person company is a private\nltd company, which has only one member, and there is a prohibition regarding\nthe public invitation for subscription of shares of the company. <\/p>\n\n\n\n<p>Some of the\ncharacteristics of one personal company are- <\/p>\n\n\n\n<ul>\n<li>One personal company can be\nformed by a company which is limited by the guarantee of shares<\/li>\n\n\n\n<li>One person company which is\ndetermined by shares, shall have a minimum paid-up capital for one lakh rupees<\/li>\n\n\n\n<li>One person company is\nrestricted from having a right to transfer the shares and prohibits any public\ninvitations for security subscription<\/li>\n<\/ul>\n\n\n\n<p>Rule 3 of\nCompanies (Incorporation) Rules, 2014 requires the following factors to be\nchecked before incorporating a One Person Company- <\/p>\n\n\n\n<ul>\n<li>A natural person and also an\nIndian Citizen shall be eligible to incorporate a Person Company and can be a\nnominee for the sole member of one person Company.<\/li>\n\n\n\n<li>A natural person cannot be a\nmember or a nominee of more than one person company at any time. <\/li>\n\n\n\n<li>One person Company should not\nbe formed for charity purposes.<\/li>\n\n\n\n<li>One person Company must not\ninclude Non-Banking Financial Investment activities and investments in the\nSecurities of anybody corporate.<\/li>\n\n\n\n<li>The paid-up share capital must\nbe at most Rs. 50 Lakhs.<\/li>\n\n\n\n<li>The average annual turnover of\n3 years should be at most Rs.2 crores.<\/li>\n\n\n\n<li>One person Company should have\nat least one director but at most 15 directors.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Characteristics_of_a_Public_Company\"><\/span><strong>Characteristics of a Public Company<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A public\ncompany, as described by section 2(71) of the Companies Act 2013, can be\ndefined as a company which is not a private company and also has a minimum\npaid-up share capital as prescribed. Public security can raise funds for the\npublic quickly, and there are no limits to the number of shareholders it can\naccommodate. <\/p>\n\n\n\n<p>The\nCharacteristics of a Public Company can be as follows- <\/p>\n\n\n\n<ul>\n<li>It is a private company that has a public company as a holding company.<\/li>\n\n\n\n<li>It must have at least seven members to incorporate a public company<\/li>\n\n\n\n<li>The transfer of shares is not restricted in a public company.<\/li>\n\n\n\n<li>A public company issues a prospectus for public to subscribe to the share capital.<\/li>\n\n\n\n<li>A public company must have atleast three directors and a maximum of fifteen directors.<\/li>\n\n\n\n<li>Shares are allotted only after receiving of minimum subscription of the share capital.<\/li>\n\n\n\n<li>A public company can invite and accept public deposits.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Difference_between_One_Person_Company_and_Public_Company\"><\/span><strong>Difference between One Person Company and Public Company&nbsp;&nbsp; <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>One Person\nCompany and Public Company are different from each other in many ways, a few of\nwhich are mentioned below- <\/p>\n\n\n\n<p><strong>Definition:<\/strong> <\/p>\n\n\n\n<p>Based on their\nmeanings, the difference between a One Person Company and a Public Company can\ndefine one person company as a company where only one person is the member or\nowner of the company. In contrast, a Public Company is registered in the share\nmarket for the public subscription of shares. <\/p>\n\n\n\n<p><strong>Ownership\/Membership rights: <\/strong><\/p>\n\n\n\n<p>There are\ndifferences between <strong><a class=\"text-primary\" href=\"https:\/\/corpbiz.io\/one-person-company\" title=\"One Person Company Registration\">One Person Company<\/a><\/strong> and Public Company based on the\nownership\/ membership for the same. One personal company can have only one\nowner, while a Public company must have a minimum of seven owners, which can\nextend to an unlimited number of owners or members.<\/p>\n\n\n\n<p><strong>Share Capital:<\/strong><\/p>\n\n\n\n<p>There are differences in share capital between One Person Company and Public Company. Whereas in One Person Company, all the rights are held by a single person, including share capital and profit shares. Whereas in a PLC, the share capital rights and profits are distributed among the members or owners according to the article of association and the ownership of shares.<\/p>\n\n\n\n<p><strong>Share transferability<\/strong>:<\/p>\n\n\n\n<p>The rights of transfer of shares also make One Person Company and Public Company different from each other. Where in One Person Company, the shares cannot be transferred by the owner; the PLC gives the right to its owners or members to transfer the shares to anyone in the market.<\/p>\n\n\n\n<p><strong>Prospectus:<\/strong><\/p>\n\n\n\n<p>There are also\nsignificant differences in the share prospectus of One Person Company and\nPublic Company. Where there is no need to issue a share prospectus in One\nPerson Company, a public company has a mandatory requirement for a prospectus\nto be given to inviting the public to subscribe to the company&#8217;s shares.<\/p>\n\n\n\n<p><strong>Directors:<\/strong><\/p>\n\n\n\n<p>One Person Company and PLC are also different based on the number of directors, where one person company should have at least one director and can have a maximum of fifteen directors. In contrast, a PLC can have at least three directors and a maximum of fifteen directors. <\/p>\n\n\n\n<p><strong>Quorum: <\/strong><\/p>\n\n\n\n<p>In One person company, one person needs to be present in the quorum, whereas in a PLC, at least five members need to be present.<\/p>\n\n\n\n<p><strong>Name of Company: <\/strong><\/p>\n\n\n\n<p>Another difference between them is that &#8220;OPC&#8221; is used as a part of the name of One person company, and a PLC uses the word &#8220;limited&#8221; as a part of its name. <\/p>\n\n\n\n<p><strong>Annual Meetings: <\/strong><\/p>\n\n\n\n<p>Holding an annual general meeting in a one-person company is optional. The director can sign the yearly returns, whereas, in a PLC, it is necessary to call for a statutory meeting. <\/p>\n\n\n\n<p><strong>Raising of Funds:<\/strong><\/p>\n\n\n\n<p>Lastly, One Person Company and a <strong><a href=\"https:\/\/corpbiz.io\/public-limited-company-registration\" title=\"Public Limited Company Registration\">Public Company<\/a><\/strong> differ in raising funds for both. While it is not possible for a one-person company to raise funds by issuing shares as one person owns it, A PLC raises funds by issuing shares to the public in the market. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Most businesses fail because of failure in choosing the correct form of business for them. In One Person Company, the owners get limited liability in single ownership, while there are unlimited liabilities in a public company. While there are many different forms of company registration, there are many differences between them. One Person Company and PLC are entirely different.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read Our Article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/one-can-start-one-person-company-in-india\/\">How one can start One-Person Company in India?<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The working and functioning of businesses in India are governed by the Companies Act 2013. The regulators have set up distinct rules for One Person Company and Public Company, based on various factors such as ownership rights, transferability rights, Membership rights and so on. The difference between both them can be understood in detail below. [&hellip;]<\/p>\n","protected":false},"author":45,"featured_media":50694,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[157],"tags":[2862],"acf":{"service_id":"4"},"authorName":"Snehita Shukla","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/07\/MicrosoftTeams-image-84.jpg","authorDescription":"Snehita has her qualifications in B.Com LLB and LLM, and holds a specialization in Corporate &amp; Financial Laws and Policy. She is hardworking, dedicated and sincere. She has a great command in english and has great problem solving, critical thinking  and writing skills which makes her stand out of the crowd. She has a keen interest in legal research work and content writing, she also has a hold in legal research methodology. She loves to take challenges and to explore new topics to research on. She aims to improve her knowledge and skills through her experience.","postViews":6173,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/50687"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/45"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=50687"}],"version-history":[{"count":9,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/50687\/revisions"}],"predecessor-version":[{"id":68532,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/50687\/revisions\/68532"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/50694"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=50687"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=50687"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=50687"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}