What is the Difference Between Sole Proprietorship and One Person Company?

Here are some of the major differences between the OPC and sole proprietorship: 

• Sole proprietorship has unlimited liability, and OPCs have limited liability. 
• Sole proprietorship foreign ownership is not allowed, and OPC directors and nominees cannot be foreign citizens. 
• In an SP, one director is required, whereas on the other side, an OPC needs minimum one director. 
• Sole proprietorship is not transferable. On the other side, OPC can be transferred to its nominee. 
• The sole proprietorship is taxed at an individual slab rate, and OPC has a tax rate of 30% profit plus along with surcharges and cess. 

Here are some of the Advantages of OPC and sole proprietorship: 

The advantages of sole proprietorship are:

•  It has a minimum compliance to start a sole proprietorship. 
• It is less expensive than compared to LLP and a company. 
• The sole proprietorship doesn't need to conduct annual meetings or hold a board. 
• A sole proprietorship has control over the business. 

The advantages of a one-person company are: 

• An OPC is a separate legal entity. 
• The liability of the shares is limited to the member's liability. 
• OPC has an easy fundraising process since it is a private company. 
• The OPC is easy to manage as it is handled by a single individual. 

Sole proprietorships don't have any legal status, and OPCs have a separate legal status. 

A sole proprietorship does not require mandatory registration, and OPCs should be registered under the Companies Act, 2013