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What is the difference between an OPC company and Proprietorship Company?


What is the difference between an OPC company and Proprietorship Company?

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A One Person Company or OPC is a fusion of Sole-Proprietorship and a private limited company. It is the most popular form of business for entrepreneurs because of its easy funding, perpetual succession and distinct identity in society. It also offers protection of personal assets from the financial liabilities of the firm. Moreover, it is easily scalable to large size and enjoys corporate status in the eyes of banks and other financial institutions making it easier for them to get loans.

OPCs also enjoy certain benefits which are not available to sole proprietorship firms, like tax benefits. For example, income from the business is taxed at corporate rates and can avail of various deductions and exemptions which would otherwise not be available to a sole proprietorship firm. In addition, OPCs are required to comply with the same laws and regulations as apply to all companies, such as filing of annual returns, payment of taxes, etc.

Lastly, OPCs provide the option of limited liability to its owner which makes it investment-ready in the eyes of investors. In case of any legal disputes or financial obligations, the owner's personal assets are safeguarded since the company is considered a separate entity and their liability is restricted to the capital invested in the company. It is a good option for SMEs to register their businesses because it has all the advantages of a private limited company without the need to have a minimum number of directors and shareholders.

 

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