One of the best ways to start a business is to choose a One-person Company(OPC). While a sole proprietorship owner is held accountable for all the liabilities of a company, it isn’t the case with OPC.
The OPC model is an alternative to the sole proprietorship structure. While this structure gives the owner full authority over the company, it also reduces liabilities and risks the owner might have to endure. In this model, the owner is the sole shareholder and director of the venture. The Director can elect a nominee as a director if he wants, but as long as he doesn’t step down from his position, the nominee doesn’t wield any real power. Thus, there is no scope for raising funds by selling equities or giving employees a share of the company’s stock.
These are the significant differences between an OPC and a sole proprietorship
Friendliness to Solo Entrepreneur metric:-
OPC model is more accommodating to the modern youth who are swayed by the startup wave. The OPC model limits the liabilities and gives the owner a free hand to do what his heart desires. The ability to nominate a director gives the ability to raise funds without forsaking your authority and also secures a successor for the future. This makes it similar to the model followed by the private limited companies.
As compared to private limited holdings, OPCs don’t have many regulations to abide by. In an OPC, there are no mandatory board meetings, although they must submit annual reports of the work, provide a statutory audit, submit IT returns and also follow the guidelines laid down by MCA.
Both Private Limited Companies and One Person Companies have to pay 30% tax on the profits. The DDT and MAT both apply to this. In this regard, the LLP model offers reduced tax burdens and a few other advantages. With help from financial advisors, the tax benefits can be availed.
Cost of setting up:-
The cost to set up a Person Company is minimal. The cost is equivalent to Private limited companies. The set-up cost amounts to 7000 INR. The cost structure varies from state to state, some states charge a bit higher like Kerala and Punjab.
The director of an OPC can not start another OPC. However, he is allowed to hold a directorship in another company, both Private or Public, but they can’t start another company. Running an OPC requires a strong commitment. You can’t run two businesses at the same time.
Our company has expertise in the registration of OPCs. It’ll just take a few moments and our experts will guide you through all the procedures in an eloquent manner.
Our experts will help you in the registration process, based on your preference. All the paperwork will be online, so no need to run from one office to another. All the formalities will be taken care of by us.