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OPC vs sole proprietorship for IT service company

28 June 2021

What are advantages of OPC vs sole proprietorship for an individual offering IT services to foreign clients? Thanks sir :) Which should one prefer ?

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5 Replies

CA Altamush Zafar (GST Consultant) (15976 Points)
Replied 28 June 2021

It mostly depends on the demand of your prospective clients.
Legally from Indian context proprietorship is easier to handle than OPC.

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CA Puja Sharma (Chartered Accountant) (5010 Points)
Replied 28 June 2021

Yes, i will agree with Mr. Zafar. Further there is tax benefit also if you conduct your business as a sole proprietor because slab rate will apply upon you.

i am Kashif (372 Points)
Replied 29 June 2021

But opc gives separate legal entity limited liability of sole member its be like private company

Harish varun (228 Points)
Replied 19 December 2024

OPC provides limited liability and a separate legal entity, making it suitable for serving foreign clients. It offers legal protection, similar to a private company. However, it comes with higher compliance and administrative requirements. A sole proprietorship is simpler, with fewer compliance obligations, but offers no legal separation between business and personal assets. The choice depends on your preference for legal protection versus ease of operation. For an individual IT service provider, consider one person company registration if legal protection is a priority, while a sole proprietorship is ideal for simplicity and lower compliance.

Bharat Bhushan (10 Points)
Replied 14 January 2025

OPC is a form of company offering separate legal entity and limited liability features. It means that it provides the personal assets protection of a director/shareholder in the event of any loss, debt or loan, etc. It has similar benefits to a company, and we all know that a company has more credibility than a sole proprietorship. This is the reason you should prefer an OPC as a business structure for an IT Service company. It's always advisable to consult an expert, one-person company registration service provider in India.