LLP vs OPC (One Person Company): A Comparative Study

Here's a comparative study between LLP (Limited Liability Partnership) and OPC (One Person Company) based on key parameters relevant for entrepreneurs, startups, and small business owners in India.

🏛 LLP vs OPC: A Comparative Study
Feature LLP (Limited Liability Partnership) OPC (One Person Company)
Governing Law LLP Act, 2008 Companies Act, 2013
Legal Status Separate legal entity Separate legal entity
Ownership Structure Minimum 2 partners, no upper limit Single person owns and manages
Ideal For Professionals and businesses with partners Sole entrepreneurs
Liability Limited to the amount contributed Limited to the amount invested
Minimum Capital Requirement No minimum capital required No minimum capital required
Taxation Taxed as a partnership firm (30% + surcharge & cess) Taxed as a private company (22% + surcharge & cess)
Compliance Burden Lower compliance compared to companies Higher than LLPs but lower than private limited companies
Annual Filing Annual return + Statement of accounts Annual return + Financial statement + Audit (if applicable)
Audit Requirement Mandatory if turnover > ₹40 lakh or contribution > ₹25 lakh Mandatory if turnover > ₹2 crore or paid-up capital > ₹50 lakh
Transferability of Ownership Possible but may be complex Restricted due to single ownership
Succession Continues as long as partners exist Requires nominee to take over in case of death/incapacity
Conversion Options Can be converted to a private/public company Can be converted into a private limited company once eligible
Foreign Investment (FDI) Allowed under automatic route in most sectors FDI not allowed directly in OPC
Name Suffix Must end with “LLP” Must end with “OPC Private Limited”

✅ Pros and Cons
LLP
Pros:

Flexibility in operations and management

Lower compliance cost

Suitable for professional services (e.g., CA, lawyers)

Cons:

Requires at least 2 partners

Higher tax rate than OPC

OPC
Pros:

Ideal for solo entrepreneurs

Corporate structure and credibility

Lower tax rate (company tax)

Cons:

Only one member allowed

Limited ability to raise capital

FDI restrictions

📝 Conclusion
Choose LLP if: Choose OPC if:
You have a partner/co-founder You are a solo founder
You want flexible internal structure You want a corporate identity
You want lower compliance cost You want lower tax rate and are okay with compliance