New business owners frequently struggle with selecting the appropriate business structure. OPCs and sole proprietorships differ in a number of ways, despite their apparent similarity. The inputs you provide can be used to create a business structure. Read ahead and the article will help you for one person company registration.
You can form an OPC (one person company) or a sole proprietorship to have complete control over your business. Without even a slight difference between them, it is impossible to compare them. Both have benefits and drawbacks. For small businesses, it’s best to register as a sole proprietorship, while for medium-sized businesses, it’s best to register as a one-person company. You can compare the two to determine which one is best for your company.
The promoter’s liability
A sole proprietorship cannot be protected due to its unlimited liability. Creditors may sell your personal assets if your business cannot pay its debts. This can happen because sole proprietorships do not have their own legal entity. However, one-person businesses (OPCs) are completely protected in such situations. Due to its legal independence, the director’s assets are always safe. If your company doesn’t need a lot of money, you should go with a sole proprietorship or an OPC.
Cost of starting a business
Because they don’t need to register, sole proprietorships typically cost less. A person is entitled to the title of sole proprietor after obtaining GST registration and a shop and establishments license. It typically runs about Rs.to sign up for a service like these. There is no cost to register. Five thousand dollars will be billed to each person. Before an OPC can begin operating, a number of registrations and formalities must be completed. totaling Rs.15000 people would be needed.
Benefits from taxes
It doesn’t matter that neither has benefits from taxes. Profits (subject to turnover) are taxed at a flat rate of 25% for one-person businesses. Both the minimum alternate tax (MAT) and the dividend distribution tax (DDT) are levied. If a sole proprietor’s turnover does not exceed Rs, they may declare profits at a flat 8% rate.1 crore.
Sole proprietorships only have to file their ITRs and keep their books of accounts up to date on an annual basis. Companies run by just one person should also have their books audited, submit annual reports, and inform the RoC of any changes to their structure. OPC would invest at least Rs.a ten thousand dollar fee for compliance.
It is not necessary to select the two.
What you should do will depend on the nature of your business. For single-person businesses, sole proprietorships are viable alternatives. You need an OPC if you do not already have one.
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