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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The difference between OPC and a sole proprietorship is that while a sole proprietorship can only have one person operating and owning it, an OPC is a legal entity which can be owned by a single director or shareholder. This allows for the formation of a distinct business structure where the owner can have complete control, but also limited liability.

An difference between OPC and Proprietorship Incorporating an OPC makes the business a separate legal entity, with its own assets and debt. Similarly, while a proprietorship does not require a nominee at the time of its formation, an OPC must have a designated member who will take over the company in the event of the death or resignation of the owner. This is a major difference which allows the OPC to enjoy some benefits of being a distinct corporate entity, such as taxation.

An OPC, being a corporation, has compliance obligations similar to those of private companies and is required to file income tax returns and get its accounts audited. This is a substantial difference from a proprietorship which only requires filing of personal income tax returns and complying with the laws that apply to individuals.

OPCs also have higher scalability potential as they are allowed to raise capital from external sources, issue shares and attract investors. This can help them expand their operations and grow their business with a larger team of employees. In contrast, a sole proprietorship is limited in terms of scalability and only depends on the founder's personal resources and creditworthiness to grow.

 

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