A business man who works at small scale prefers to continue its business as Sole Proprietorship due to less compliance requirements As soon as business grows and spreads there is urge to separate the bank accounts & the tax filings of the Sole Proprietor and that of the business. Therefore, it is the right time to get it converted into a Private Limited Company.
Conversion of a Sole Proprietorship into a Private Limited Company can only be done post execution of an agreement between the Proprietorship and the Private Limited Company (once it is incorporated) with respect to sale of the business. Further the Memorandum of Association of such Private Limited Company shall have the following line as one of the objectives “the takeover of a Sole Proprietorship Concern”.
Legal Window has team of experts providing you the best assistance, timely delivery and guaranteeing the highest customer satisfaction with respect to conversion of Proprietorship into Private Limited Company .You may get in touch with our team on 072407-51000 or email firstname.lastname@example.org for conversion of Proprietorship into Private Limited Company and Compliance services.
Advantages of Conversion of Proprietorship firm into Pvt. Ltd. Company
Minimum Two Directors and maximum Fifteen
Minimum Two Shareholders
Minimum one Director shall be Indian resident
Digital Signatures of Subscriber and Directors
No Minimum Capital requirement
Director Identification Number if available.
Documents Required for Conversion of Proprietorship firm to Pvt Ltd company
Note:- In case of NRI or Foreign National documents of Directors and Subscribers must be notarized or apostillled.
Process of Conversion of Proprietorship firm to Pvt Ltd company
1. Complete the Application Form
You are requested to first fill the simple questionnaire provided by our expert team.
2. Document Processing
At the second step we will be requiring the documents in accordance with the questionnaire filled by you so that we can arrange them as per the requirement and for processing.
3. Application for DSC
DSC is a Digital Signature Certificate consisting of the E-signatures prepared. It will approximately take 1 day.
4. Name Availability
The next step is check the name availability. The name should be unique in nature and should not be similar to name of any other entity registered. It may take at least 1-2 days.
5. E-filing for incorporation of a Company
Once the name is approved, an online application is required to filed through SPICE+ along with the requisite documents as obtained from the client with ROC. The MOA as well as AOA shall be filed online. This process again takes approximately 2-3 days.
6. Get Certificate of Incorporation
Once the Company gets incorporated we will share all the docs like Incorporation Certificate, MOA , AOA and Digital Signatures.
Convert your Proprietorship to Pvt. Ltd. Company ₹15,000/-
How to Select the Name of Company
- You can check Company name availability thereby logging into MCA where you need to keep in mind two or three available options along with the activity type. Our team will assist you in the selection of name of company.
- Also, along with checking the name availability we also need to check the trademark if already registered under the proposed name which makes the online application for registration more powerful. If you want to have a trademark of your word or logo you can get the same through Legal Window by clicking on the below mentioned link Trademark Registration
Other Key Points
- If the proposed Director is already having the DIN then you can also check whether DIR-3 KYC is completed. You can verify the same with the help of our experts. If the same is not done yet, it can be done with help of Legal Window.
- The private limited company is required to manage all the compliances after incorporation of the company like appointment of statutory auditor, filing commencement of business, Income Tax Filing, Annual Returns with ROC and other compliances as required by the law. Legal Window has a team of experts who keeps an eye on the due dates of your compliances and reminds you through mails.
- The Assets & Liability of the Sole Proprietorship relating to the business shall be immediately before the succession should become the Assets & Liability of the company.
- In case the shareholding of the sole proprietor in the private limited company is not less than 50% of the total voting power in the company and his shareholding continues to remain so for a time period of 5 years from the date of the succession, it will not attract capital gain.
- Sole Proprietor cannot receive any other benefit or consideration except by way of allotment of shares.
FAQs on Conversion of Proprietorship firm to Pvt. Ltd. Company
Minimum two Directors and two Members agreeing to subscribe the shares of the Company.
Yes, for Indian nationals becoming a Director in a Company it is mandatory to have a PAN Card and Passport in case of Foreign Nationals.
Yes, a Private Company can carry multiple related business activities if it is mentioned in the company’s objects and been approved by the registrar. You can not operate entirely different activities like construction and food company under one name.
During every financial year, the company must hold at least 4 board meetings (one in each quarter) and one Annual General Meeting (AGM) and EOGM if required. Further, the company has to get the financial statements audited by an independent auditor. Subsequently, it shall file formslike AOC – 4 and MGT – 7 and other forms as applicable as part of Annual Compliance within given time.
Yes, a Director can also become a shareholder and vice versa as a Company is a Separate Legal Entity.
There is absolutely no minimum capital required but generally people prefer and are advised to incorporate the same with a minimum capital of Rs. 1 Lacs.
No, the money cannot be withdrawn but can be used by the Company for official purpose like for paying salary to staff and employees, other administrative expenses etc.
As per Companies Act, 2013 it is compulsory to have an individual or firm as an Auditor of a Company. The first Auditor shall be appointed within 30 days from the date of Incorporation by the Board of Directors .
Once, the company gets registered, it should comply with the following within the prescribed time frame.
- Opening of the company’s current account and depositing the subscription money
- Appointment of a Statutory Auditor within 30 days of incorporation
- Issue and allotment of shares and provide Share Certificate
You can register a Private Limited Company at a commercial or residential place by providing the documents as specified. There is no restriction by the department.
Convert your Proprietorship firm into Private Limited Company Starting at Just ₹ 15,000/-only (Inclusive of all fees)(Inclusive of all fees)