Sole proprietorship vs OPC: Which one is right for your business?

SINCE the one-person corporation (OPC) was introduced in the Philippines last 2019 through Republic Act 11232, many entrepreneurs and freelancers have been confused about the differences between a sole proprietor and an OPC, not knowing which one is right for them. Starting a business in the Philippines is already daunting. The potential costs, should one choose wrong, can be costly. Here, we explore the differences between these two business structures and their advantages and disadvantages.

To start, we need to define these two entities. A sole proprietorship is a business owned and operated by one person. This means one person has complete control over all decision-making regarding the business. On the other hand, OPC is a business structure that allows a single person to incorporate a company as a separate legal entity. This means the corporation is separate from the owner and can enter into contracts, own assets and incur liabilities in its name. The owner of the OPC is called a "single stockholder," and is the corporation's sole owner.