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Following are some of the major differences between the two forms of Business-<\/p>\n
1. Recognition<\/strong> – An OPC is recognized under Companies Act, 2013. To form an OPC, one has to fulfill all the procedures laid down in the Act. There is no such requirement for Proprietorship.<\/p>\n 2. Conditions on the owner<\/strong> – An OPC can be formed only by an adult Individual who is a citizen of India as well as a Resident. There is no such conditions for Proprietors.<\/p>\n 3. Management<\/strong> – The owner may appoint director(s) to run manage the business or can run it himself. In Proprietorship the owner himself runs the business.<\/p>\n 4. Separate entity<\/strong> – In proprietorship, there is no distinction between the owner and the business. Whereas in OPC, identity of the business and that of owner\u2019s is separate.<\/p>\n 5. Liability<\/strong> – The owner of a proprietorship suffers from unlimited liability. He is personally liable if the business suffers a loss. But the owner of an OPC is not personally liable for the losses of the business.<\/p>\n 6. Taxation<\/strong> – An OPC is taxed as per the provisions of Income Tax Act as a Private Limited Company. In case of proprietorship, the income of the business is considered as the income of the owner and he is taxed accordingly.<\/p>\n