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Advantages of Being a One Person Company than a Proprietorship Firm
What is an One Person Company
As per provision of section 2(62) of the Companies Act, 2013 defined (62) “one person company” means a company which has only one person as member.
For a normal private limited company, it requires a minimum 2 members, this is how a one person company differs from a private limited company. As similar as a proprietorship, it just requires a one member, there cannot be anyone else to share the same.

How one person company is more preferable as compared with Proprietorship

1. Nominee: For creating an OPC, you need to appoint a nominee. On the demise of the opc member, the nominee will take charge of the company, so the company will exist continuously. The nominee

2. Independent legal entity: OPC is considered as a separate Legal Entity; that is to say the company and the owner of the company are considered as two separate bodies. But whereas the Proprietorship firm is not a separate entity, both the proprietor and the form are considered as one. Not even a separate pan card is available for a proprietorship firm.

3. Limited Liability: If the One Person Company undergoes a financial distress because of any reasons, the personal assets of the owner or the member shall not be utilised to pay off the debts of the Company as the liability of the person is limited to its share. But whereas the liability of the Proprietorship firm is un limited

4. Tax Benefits: The proprietor needs to tax first and then utilize the profit for his luxury expenses. But whereas the One Person Company can buy the luxuries such as a Car for the utility of the director and a rented bungalow for the stay of its Director and corporate tax can be paid after deducting the expenses.

5. Separate Property: As the OPC is a separate legal entity, it can hold property on its own. The OPC will become the owner of its assets, and the members will not have any insurable rights in the assets of the company. But whereas the Proprietorship cannot hold a property, either movable or immovable

6. Social Recognition: As One Person Company is a form of Limited Company, it has a big recognition, so the customers and vendors easily build credibility over the company. But whereas the Proprietorship is a normal type of business ownership.

7. Easy Loan from Bank
Banks prefer to lend money to the company, as this is formed by the Companies Act.But a Proprietorship firm faces a huge difficulty to get loans for business through banks.

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So it is ideal to register your startup as a One Person company rather than a proprietary firm.

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