What are some key benefits/ reasons of the conversion of Proprietorship Firm into a One Person Company?

  • Investors prefer corporate structures over proprietorship firms.
  • The liability of the members or the directors are limited in case of a one person company whereas in case of proprietorship firm the liabilities are unlimited
  • A one person 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 one person company and not by any proprietorship firm.
  • The one person 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 considered as owners as well as the manager of the firm.