OPC vs Proprietorship
A side-by-side comparison of One Person Company and Sole Proprietorship — cost, timeline, liability, compliance, taxation, and which one is right for you in 2026.
The short answer
Choose OPC if you want limited liability and a formal company identity. Choose Sole Proprietorship if you want the fastest, cheapest setup and are comfortable with unlimited personal liability while testing an idea.
| Criteria | OPC | Proprietorship |
|---|---|---|
| Professional fee (from) | ₹9,999 | ₹2,999 |
| Govt. fees | ₹4,000–₹8,000 | Minimal (registration-dependent) |
| Timeline | 12–15 working days | 5–7 working days |
| Liability | Limited to shareholding | Unlimited — owner personally liable |
| People required | 1 director + 1 nominee | 1 owner |
| Raise equity funding? | No equity funding | No equity funding |
| Compliance burden | Medium — annual filings required | Minimal |
| Taxation | Flat 22–25% corporate tax | Taxed as individual income (slab rates) |
| Credibility | Higher than proprietorship | Lowest — no separate identity |
| Conversion | Converts to Pvt Ltd above ₹2 Cr turnover | Can convert to OPC/LLP/Pvt Ltd |
One Person Company
Best for: Solo founders who want limited liability and a formal company without a co-founder
Pros
- Solo founder with limited liability
- Separate legal entity
- Can convert to Pvt Ltd later
- Professional company identity
Cons
- Cannot add shareholders/co-founders
- Turnover capped at ₹2 Cr
- Annual compliance still required
Sole Proprietorship
Best for: Freelancers, small traders, and solo operators testing an idea with minimal overhead
Pros
- Fastest and cheapest to set up
- Lowest compliance
- Complete control
- Taxed at individual slab rates
Cons
- Unlimited personal liability
- Cannot add partners or investors
- No separate legal identity
- Hard to get business loans
OPC vs Proprietorship — FAQs
What is the main difference between OPC and Proprietorship?
One Person Company: Solo founders who want limited liability and a formal company without a co-founder. Sole Proprietorship: Freelancers, small traders, and solo operators testing an idea with minimal overhead. Choose OPC if you want limited liability and a formal company identity. Choose Sole Proprietorship if you want the fastest, cheapest setup and are comfortable with unlimited personal liability while testing an idea.
Which is cheaper to register — OPC or Proprietorship?
OPC starts at ₹9,999 and Proprietorship starts at ₹2,999 (professional fees, government fees extra at actuals).
Which has lower compliance — OPC or Proprietorship?
OPC compliance is medium — annual filings required. Proprietorship compliance is minimal.
Can OPC raise funding?
OPC: No equity funding. Proprietorship: No equity funding.
Still not sure which one to pick?
Take our free 2-minute quiz, or talk to a CA — we'll recommend the right structure for your situation.