What is the Difference between an OPC and Proprietorship?


What is the Difference between an OPC and Proprietorship?

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When you start a business, one of the first things to consider is what kind of legal structure to select. This decision impacts a variety of important factors, such as taxation, liability concerns, and potential growth. In this article, we'll take a look at the key differences between an OPC and a sole proprietorship so you can make the best choice for your business needs.

The main difference between an OPC and a sole proprietorship is that an OPC is a separate legal entity with limited liabilities, while a sole proprietorship has unlimited liability. An OPC is also subject to fewer compliance requirements than a private limited company or LLP, making it easier to register and manage.

Another big difference between an OPC and a sole-proprietorship is that an OPC can issue shares to investors, while a sole-proprietorship does not. This can be an important consideration for entrepreneurs looking to scale their business and attract outside investment. In addition, an OPC can benefit from the credibility and perceived stability that comes with being a registered business entity, while sole-proprietorships may be viewed as less trustworthy by clients and partners.

Another significant difference between an OPC and a sole-proprietorship are the taxation benefits. Sole-proprietorships have no legal separation between the owner and the business, so the owner's personal assets are at risk if the business suffers losses. On the other hand, an OPC's liability is limited to the capital contribution of the single member.

 

 

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