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 One Person Company (OPC) is a separate legal entity; it can be registered under the Companies Act 2013 with only one shareholder or owner. It is an ideal structure for entrepreneurs who are looking for venture capital funding, outside investment or want to benefit from limited liability protection.
OPC has the flexibility to raise funds and offer benefits such as a distinct identity, transparency and perpetual existence. However, it is important to note that there are some key differences between an OPC and a sole proprietorship which should be considered when deciding to register your business.
The main difference between an OPC and a sole proprietorship is that OPCs have limited liability for their directors and shareholders. This means that if the business incurs losses, the directors personal assets are protected and can't be used to recover debts.
OPCs are also required to comply with a few more requirements and regulations than a sole proprietorship. For example, an OPC must get its accounts audited and file annual returns. In addition, an OPC must hold meetings at least once a year.
Moreover, an OPC must be a natural person and be an Indian citizen. Lastly, an OPC must be resident in India for at least 180 days in the preceding financial year to qualify as a member. The shareholder or nominee of an OPC must also be a natural person and be an Indianresident. Moreover, the nominee must consent to the appointment.
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