Question:
Vikram, a skilled graphic designer, has been running his design studio as a sole proprietorship. Over time, his business has grown, and he started handling larger projects with higher risks. While he enjoys the simplicity of managing his sole proprietorship, he is worried about his personal liability if something goes wrong. On the advice of his friend, Vikram is considering converting his business into a One Person Company (OPC) to limit his liability and improve his business’s credibility. Based on the above case, compare Sole Proprietorship and One Person Company (OPC). Which form of business entity would be better for Vikram and why?
Vikram, a skilled graphic designer, has been running his design studio as a sole proprietorship. Over time, his business has grown, and he started handling larger projects with higher risks. While he enjoys the simplicity of managing his sole proprietorship, he is worried about his personal liability if something goes wrong. On the advice of his friend, Vikram is considering converting his business into a One Person Company (OPC) to limit his liability and improve his business’s credibility. Based on the above case, compare Sole Proprietorship and One Person Company (OPC). Which form of business entity would be better for Vikram and why?
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OPCs combine limited liability with simplicity, ideal for single entrepreneurs expanding their business.
Updated On: Jul 4, 2025
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Solution and Explanation
Comparison between Sole Proprietorship and One Person Company (OPC): 
Which is better for Vikram and why?
Given Vikram’s business growth, higher risks, and liability concerns, OPC is better because it offers:
Limited liability protecting personal assets.
Separate legal entity ensuring business continuity.
Improved credibility with clients and banks.
Though OPC requires more compliance, the benefits suit Vikram’s growing business needs.
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