Difference of Sole Proprietorship and One Person Corporation
Jacel de Jesus in EntrePINOY
Jan 03, 2021 • 1 min Read
Ngayong pandemic, iba’t-iba ang naidulot at epekto nito sa ating lahat. Isa sa mga positibo at nakakatuwang resulta ng pandemya ay ang pagdami ng mga taong nag-umpisa magnegosyo.
For the business transactions to be legal, we need to register it at the right government unit depending on what type of business do you plan to set-up or you’re already in. A businessperson may choose from Sole Proprietorship, Partnership, and Corporation. In 2019, SEC has approved the registration of One Person Corporation so that more people can further venture into business.
But before setting up a business, the usual question is what type of business suits me. Let’s start first the business information intended para sa isang tao lang. Para mabigyan namin kayo ng kasagutan, kami sa “Ang Pinoy” ay nag-research sa pagkakaiba ng Sole Proprietorship and One Person Corporation.
| Sole Proprietorship | One Person Corporation | |
| Government Organization in-charge | Department of Trade and Industry (DTI) | Securities and Exchange Commission (SEC) |
| Definition | A business owned and run by an individual and classified as the simplest form of business. | A corporation with a single stockholder, must be a natural person, trust, or estate. |
| Business Personality | One and the same as the sole proprietor | Separate legal personality from sole shareholder |
| Tax Identification Number (TIN) Number | Same as the TIN number of the business owner | Different from the TIN number of the owner |
| Business Validity | Five years | Perpetual |
| Accountability/Liability | Owner is fully accountable | Liability is limited to the extent of the shareholder’s assets |
| Convertible to Corporation | Yes | Yes |
| Business Succession | When the proprietor dies, the existence of the sole proprietor business is terminated | When the sole shareholder dies, the designated heir can continue managing the business |
