What are some key benefits/ reasons for conversion of Proprietorship Firm into a company?

  • Investors prefer corporate structures over Proprietorship Firms.
  • The liability of the members or the directors are limited in case of a company whereas in case of Proprietorship Firm the liabilities are unlimited
  • A company is more transparent structure of business as compared to Proprietorship Firm
  • The benefit of startup recognition under the startup India scheme of the government of India can be availed by a company and not by any Proprietorship Firm.
  • The company has a separate legal identity as compared to a Proprietorship Firm.
  • There is a separation of ownership and management in a company, whereas in Proprietorship Firm, the proprietor is the owner and the manager of the firm.