Never Register A Sole Proprietorship

All set to jump into the deep ocean of opportunities. The success of your journey is not in correlation with how well you dive into the ocean. Being a pro at diving is not a prerequisite to explore the exotic depth of your lean revolution.


Unlike Scuba Diving, you can always jump alone. The trends have changed, One man Army can win the battle. Just ensure you structure out well, initially. Make the very foundation of your experiment strong by making the right choice.

There are a lot of options available but have been certain to initiate a revolution single-handedly, the list narrows down to Two option; namely, SOLE PROPRIETORSHIP or ONE PERSON COMPANY. Both are one and the same thing, yet not. They just share the same essence.

If we dissect the name, both indicate “single ownership” i.e. the experiment will purely be owned and controlled by one person, having the entire authority and responsibility. But Sole proprietorship is an old-school concept whereas One Person Company is a B-School concept.

The point in contention is not to convince you to be trendy. Rather just make the RIGHT JUMP keeping in mind all the pros and cons. Let's get familiar with both the structures :

Be Unique in the eyes of Law

A sole proprietorship is not treated separately from its owner. Both are identical in the eyes of law. On the contrary in one person company has a Separate legal entity.

Ascertain the unexpected dues beforehand

A sole proprietor has Unlimited liability. In case of pending dues, the proprietor will have to settle the same from his personal estate. On the contrary, the liability in One person company is limited to the extent of  unpaid Subscription money.

Don’t let your dream die with you

A sole proprietor can transfer his estate to another through will in case of his demise, but it is uncertain as the same can be challenged in the court. On the contrary, in One Person company, every director mandatorily has to nominate a nominee, who is entitled to get the entire legacy.

Get a secured name for your experiment

Sole proprietorship is registered with respective state authorities, uniqueness in the name cannot be maintained throughout the nation. On the other hand , in One person Company, you get to apply for an exclusive name. The entire data of all the companies incorporated is scanned to check the uniqueness irrespective of the structure.

You can expand overnight

In Sole Proprietorship the scope of expansion is restricted. It fails to attract experts in their business. Employees tend to favour a corporate structure over an owner- centric structure. On the other hand, One Person Company can increase the number to directors to a maximum of 15.

Infuse Funds as and when needed 

In Sole Proprietorship the scope to raise funds by a single person gets tough. It fails to attract experts in their business. On the other hand, One Person Company can easily infuse capital as the incorporation process inspires the trust in the lenders.

Ease of General Compliances

In sole Proprietorship, if the turnover exceeds the threshold limit then audit needs to be carried out as per the provisions of Income Tax Act. On the other hand, One Person company is exempt from conducting meetings. It files Annual returns like normal companies and gets their account audited.

It allows a single person to run a company limited by shares.

If you already out there in the midst of the ocean don’t fret even you can consider a change after weighing all the potential and risks involved. Update yourself with the trend waves. Even if you are an Old School guy, at the end what matters is to Jump of Right.

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