One Person Company vs Limited Liability Partnership – Company Registration in India

Introduction

Starting a business takes lots of efforts and it takes lots of costs so cost-cutting is very important for any new business because they investing their all money and energy in new business for setting up and they want to generate all money soon, and cost cutting will help them so during incorporation of your company you can cut your cost in your incorporation registration. If you are thinking of starting a business, then you can cut your cost by making a cheap legal entity. Purpose of making a cheap legal entity is it will cut your cost in making compliance with the concerned authority for e.g. if you incorporate your business as a private limited company then you have to pay more for registration and after registration you have to comply with the Ministry of Corporate affairs every year which can increase your cost so all you have to do it make your business as a cheap and important legal entity. You can start your business with One Person Company or Limited Liability Partnership both required less compliance as compare to the private limited company. This article talks about the One Person Company and Limited Liability Partnership, and this will give you an idea for your business registration.

One Person Company

If you are thinking of starting a business as a company but you are the single person to incorporate your business then you don’t have to worry because you can make your company as a one-person company which does not require two or more person for incorporation a company whereas Private Company limited requires two or more person for incorporation. So if you are single person, then you can incorporate your business as One Person Company. You have to comply with the rules and regulation of Ministry of Corporate affairs for running your one person company, and you have to comply with the Registrar of companies every year. You have to submit your annual and financial statement to the Registrar of Companies whereas there is more compliance required by the registrar of a company if you are running a private limited company. One Person Company is an important legal entity because it is a separate legal entity which can sue and can be sued on the name of company and it has perpetual succession, owner of one Person Company will nominate a nominee so in the case of death of the owner, and nominee will become the owner of the OPC. It can be incorporated with a minimum capital of 1 lakh rupees which is very less as compared to other legal entity. You have to follow the below-given procedure for One Person Company Registration.

• First, you have to make Digital signature certificate for a proposed director.
• Then you have to make Directors Identification number which is very important for incorporation and it will be very useful in the future.
• Then you have reserved your company name with the Ministry of Corporate affairs through Web Run services. You cannot copy , so you have to think a unique name for your one person company
• Then you have to file your incorporation form along with the supporting documents which include Memorandum of Association and Article of Association, after successful submission of your incorporation form you will get your incorporation certificate.

Limited Liability Partnership

Two or more person can incorporate limited Liability Partnership (LLP); it cannot be incorporated by one person. Limited Liability Partnership is governed by the Limited Liability Partnership Act and its compliance should be done with the Registrar of companies. If we compare it to the partnership firm then there are many differences, it looks like a partnership firm, but it has more benefits than partnership firm as it is a separate legal entity which can sue or be sued from others. It has many benefits like its incorporation fee is less than a private limited company and it requires less compliance as compare to the private limited company, an LLP is required to submit their annual statement to the ROC. Decision making is an important process for any business which is efficient in an LLP because partners share their experiences.

If you want to incorporate your business as a Limited Liability Partnership Firm Registration then you have to follow the Procedure of Ministry of Corporate affairs, here procedure is mention below

• First, you have to get your Digital Signature Certificate of a proposed director, it is a very important document for registration of your LLP and it will be very useful in future as all digital documents will be signed by this.
• Then you have to reserve your business name, you should not copy from others as it is prohibited. You can reserve your LLP name through LLP-RUN services for which you have to visit the official Website of Ministry of Corporate Affairs.
• Then you have to file your Filip form it is an incorporation form, so you have to file this along with required documents, after successful submission of incorporation form you will get your incorporation certificate
• Then you have to submit your LLP agreement to the Registrar of the company within a prescribed time, and all the partners should sign it.

Conclusion

As you can see above that both One Person Company and Limited Liability Partnership are easy to start and their compliances is very cheap and it is very important to get your registration done as it will give your legal protection under the laws.