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Choosing the right business structure is one of the most important decisions a founder will make. If you’re a solo entrepreneur or launching a startup in India, you’ve probably heard of One Person Company (OPC) and Private Limited Company (Pvt Ltd).

Both offer legal recognition, limited liability, and a structured way to operate. But they serve different purposes.

Let’s break down the key differences, pros, cons, and ideal use cases β€” so you can choose the best model for your vision.


πŸ”Ή 1. Ownership & Number of People Required

OPC:

  • Requires only 1 person (as shareholder + director)
  • Must nominate one additional person in case of death/incapacity

Pvt Ltd:

  • Requires at least 2 shareholders and 2 directors
  • Can have up to 200 shareholders

βœ… Choose OPC if you want to start solo. Choose Pvt Ltd if you plan to onboard co-founders or investors.


πŸ”Ή 2. Fundraising and Investor Attractiveness

OPC:

  • Not eligible for equity fundraising or venture capital
  • Limited to self-funding or loans

Pvt Ltd:

  • Fully eligible for VC, angel, and private equity funding
  • Preferred legal structure by investors

βœ… If fundraising is in your roadmap, Pvt Ltd is the only way forward.


πŸ”Ή 3. Compliance and Regulatory Burden

OPC:

  • Lower compliance compared to Pvt Ltd
  • Exempt from holding AGMs
  • Fewer filings and board meetings

Pvt Ltd:

  • More documentation and ROC filings
  • Mandatory board meetings, AGMs, and audits

βœ… For early-stage solo entrepreneurs, OPC offers simpler maintenance. Pvt Ltd needs more structure.


πŸ”Ή 4. Conversion and Scalability

OPC:

  • Mandatory to convert into Pvt Ltd once turnover crosses β‚Ή2 Cr or paid-up capital exceeds β‚Ή50 lakh
  • Not ideal for long-term growth or scalability

Pvt Ltd:

  • No such limitations
  • Fully scalable across states, locations, and funding rounds

βœ… OPC is great for testing the waters. Pvt Ltd is built for long-term growth.


πŸ”Ή 5. Taxation Differences

OPC:

  • Taxed at a flat rate of 22% + cess (like Pvt Ltd)
  • No significant advantage

Pvt Ltd:

  • Same tax rate
  • However, eligible for startup schemes and deductions if registered under DPIIT

βœ… Tax rates are similar β€” but benefits under Startup India usually favour Pvt Ltd setups.


πŸ”Ή 6. Brand Image and Professional Perception

OPC:

  • May appear as a solo/small-scale business
  • Less preferred by big clients or vendors

Pvt Ltd:

  • Strong corporate image
  • Required by many clients to work as a vendor or partner

βœ… For B2B and formal enterprise deals, Pvt Ltd carries more weight.


πŸ”Ή Final Verdict

FactorOPCPvt Ltd
Minimum People12
Fundraising Eligibility❌ Not Allowedβœ… Fully Allowed
Compliance Burdenβœ… Low❌ Higher
Scalability❌ Limitedβœ… Unlimited
Ideal ForSolo EntrepreneursStartups, Growth-Focused Teams

πŸ”Ή Call to Action

Still unsure which structure fits your goals?

πŸ‘‰ Talk to a Startup Advisor at Start Bharat

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