OPC to Sole Proprietorship

An OPC cannot be converted into Sole Proprietorship. Conversion of sole proprietorship into OPC is possible but no specified way is prescribed in law.

Can a One Person Company convert into Sole Proprietorship?

No, conversion of One Person Company into Sole Proprietorship is not possible as the law is silent about such conversion. But, vice-versa is possible i.e. the conversion of Sole proprietorship into One Person Company is possible. Once you registered your business entity as a One Person Company as per the provisions of the Companies Act, 2013 then the conversion into the unregistered form of business entity is not possible.

Advantages of OPC over Sole Proprietorship

Although Sole Proprietorship is the easiest form of business entity which is suitable for the small sized businesses but it does not involve legal recognition and no registration is required to form such business entity. The major burden to run a sole proprietorship is the unlimited liability of the sole owner. But, the new concept of OPC eradicates all the major lacking points of the sole proprietorship. Forming OPC is more advantageous for the small businesses.

• Protection to the personal assets of the company which means the owner has the limited liability to the extent of its share.
• OPC is registered as a private company and private companies are the trusted forms of business so easily get lending from the financial institutions.
• Easy procedure to convert into private limited company.
• In OPC, the member and the company are separate entities in the eyes of the law.
• OPC obtained the corporate identity and brand recognition.

Still, the concept of OPC is new in Indian business market but as the time will pass it will embrace as a most successful business entity.

Process of conversion of Sole Proprietorship to OPC

To convert into OPC there has to be one member cum director and one nominee. There is no specified way for the conversion of the Sole Proprietorship into OPC. You have to follow the whole procedure for a fresh registration of OPC. You can register the OPC with the same name if it is available. Although the process is very simple but you have to take great care. The below link explain you each and every step to incorporate an OPC.