So what is ones' complement? Simply all bits flipped. (XOR the word length – each bit becomes its complement.) There's a simplicity and beauty to this and math just works with addition and subtraction. There's also the notable feature of the most significant bit, which, if excluded from the usable range of numbers, becomes the sign-bit. If it is empty (clear), it must be a positive number, if it's set, we have a negative number (since it must be a clear bit flipped).
So everything perfect, then? Not at all. What happens, if we flip all bits on zero (0000)? Well, it becomes all bits set (1111). How do we convert a number to it's signed counterpart? We flip all bits and … Oh, this must be negative zero. Maybe we can deal with this? Sort of. But it's somewhat nasty, because we need an extra steps to traverse zero. Say, we go from +1 to -1, there isn't just a zero in between, making this a difference of 2 – as it should be –, but there's +0 and -0. Three steps. That's odd.
Can we do something about this? Namely, can we get rid of negative zero? Well, as we've seen, we have an extra step on the negative side of things… what about just adding 1 to compensate for this? So, for -1, we wouldn't write 1110 (flipping all bits of 0001), but 1111? Just the same, for -2, we would add 1 to 1101, making this 1110, and so on. – Well, this works! we just eliminated negative zero! Welcome to two's complement.
(So, is it now perfect? Well, sort of. We now have introduced a certain asymmetry into our number system: on the side of things, where the sign-bit is clear, zero is the first number and +1 the second one, while numbers with the sign-bit set start with -1. Thus, we have an excess number on the negative side of the number range described by our word length. We just can't have it all. Well, we could switch to balanced ternary, but this is another story…)