Conversion Of Sole Proprietorship Firm To One Person Company
- A Sole proprietorship is meant to be owned and managed by a single person. The entire business depends upon the sole owner, who has to take all the responsibility and risk single handed.
- Forming a Sole proprietorship firm does not involve legal requirements or paper works, if fact, there is no registration available for starting a Sole Proprietorship firm. Any one can start a sole proprietorship firm, if they have enough capital and idea of running a business. The real burden of running a sole proprietorship firm is the unlimited liability of the owner.
- But, One Person Company eradicates all the above problems. If you register a One Person Company, it would become a Separate Legal entity with perpetual succession and also with limited liability.
- Forming a One Person Company gives more advantages for the small traders, businessmen and entrepreneurs, as the registration and maintenance cost for the company is minimal.
How One Person Company differ from Sole Proprietorship Firm:
- A One Person Company is a Separate Legal entity differs from sole proprietorship firm, where the owner and the entity are one and the same.
- An One Person company has limited liability whereas in sole proprietorship liability is not limited and extends to the individual assets.
- In the OPC registration, a nominee has to be appointed, that nominee should be a person resident and natural born citizen of India. The nominee in the event of death of the sole owner becomes the member of the company and undertakes the management and affairs of the company.
- Formation of One Person Company involves time and paperwork. Necessary RoC fee has to be paid and also requires services of a Company Secretary to do the necessary drafting work & signing for incorporating the company. For setting a Sole proprietorship firm the above formalities are not required.
- The best part of One Person Company is that a Corporate identity and a Brand recognition would be obtained. This is the only reason where most of the people show interest in starting a company.
Though the concept of an OPC is still very new in Indian entrepreneurship and thus very revolutionary, it will take time for such a new concept to be incorporated with complete efficiency, but as and when the time will pass, an One Person Company will have a sparkling future and it will be embraced as a most successful business concept.
- Professional Fee
- Affiliation Fee
- Government Fee
- Service Tax Fee
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