Difference between One Person Company and Wholly Owned Subsidiary Company

As per Section 2(62) of the Act, OPC means a company having only one person

as a member. Such member must be a natural person so it means only an individual can become a member in OPC. On the other side , wholly owned subsidiary company (WOS) is a company in which virtually entire capital is held by a company called holding company and to fulfill the requirement of minimum number of members, at least 1 share is held by nominee appointed by the holding company. So in context of capital it is somewhat similar to One Person Company, because in OPC entire capital is held by its sole member and likewise in ‘Wholly Owned Subsidiary Company’ virtually entire capital is held by one  member i.e holding company  and other member/s is/are given one share each to fulfill requirement of minimum number of members.

                   OPC can be incorporated by only an Individual who is a resident in India. It means that such member may not be the resident after the incorporation of the company. But in case of WOS , member may be individual or non-individual. So even a company may become member in case of WOS.

                In my opinion WOS should have been allowed to be registered as OPC but law makers seem to have given the benefit of OPC only to small enterpreneurs. 

            OPC must be a small company, so it means its paid up capital must not exceed Rs. 50 lacs and average Turnover not to be more than Rs. 2 crore during the last three years. But WOS is not bound by this requirement.

      OPC must be a private company, but WOS may be a private as well as public company. 

        Member of OPC is required to appoint a nominee so in case any unwarranted even , nominee may become member. Member in case of WOS company is not required to appoint nominee.