Following are the main points of comparison between a Sole Proprietorship and a One Person Company:-
| Particulars |
Sole Proprietorship |
OPC |
| Nature |
An entity where it is run and owned by one individual and where there is no distinction between the owner and the business |
OPC allows a single person to run a company limited by shares |
| Liability |
The person/owner is alone liable for the claims which will be made against the business. |
The liability of the share holder will be limited to the unpaid subscription money in his name. |
| Taxation |
Tax calculated on the basis of slab rates of Individuals |
Flat Rate 30% plus surcharge, cess and MAT. The provisions of dividend distribution tax would also be applicable on the company.
DDT will be abolished from the FY 2020-21. |
| Nominee |
In sole proprietorship, this can only happen through an execution of WILL, which again may be subject to a challenge in the court of law. |
OPC appoints a nominee designated by the member. The nominee shall in the event of death of the member, become a member of the company and will be responsible for running the company. |
| Audit |
A sole proprietorship would only need to get audited under the provisions of Section 44 AB of the Income Tax Act, 1961 once its turnover crosses the prescribed threshold limit. |
A One Person Company has to file the annual returns etc,. just like a normal company and would also need to get its accounts audited in the same manner |
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