Conversion of Sole Proprietorship into Pvt. Ltd. Company

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Transform your proprietorship into a robust Pvt Ltd Company and enjoy unparalleled benefits and opportunities.

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Steps to convert Proprietorship into Pvt Ltd Company

Fill the form and provide documents

Just fill your contact details and share the required documents for conversion.

Sign and share the documents

Our team will share the documents for signatures, just sign and share scanned copies.

Filing of registration application

Registration application is filed with concerned authority and we will keep you updated on its status.

Overview

Converting your Indian proprietorship to a Private Limited Company involves several key steps to ensure a smooth transition. This process limits liability, establishes separate bank accounts, and provides a unique tax structure. With a separate legal entity status under the Companies Act, 2013, your business gains credibility and safeguards personal assets, reducing the risk of liability.

Documents Required

DIN and DSC of proposed directors
Drafted MOA and AOA specifying the company’s objectives, rules, and regulations.
Consent from all partners or the sole proprietor to convert the business into a Private Limited Company
The Certificate of Incorporation of the existing proprietorship business
Copies of PAN card and address proof (e.g., Aadhaar, Passport, Voter ID, etc.) of all proposed directors.
Recent passport-sized photographs of all proposed directors
Documents verifying the registered office address, such as rent agreement, lease deed, or ownership proof.
No Objection Certificate (NOC) from the landlord of the registered office premises.
A board resolution approving the conversion and authorizing the directors to undertake necessary actions.
A declaration by all directors stating that they have not been disqualified from becoming directors.
Copies of recent utility bills as proof of the registered office address

Process of Conversion

Obtain DSC and DIN: Apply for DSC and DIN if you don’t have them already. These are required for the incorporation process.
Name Approval: Choose a unique name for your Private Limited Company and check its availability on the MCA website. Once approved, the name is reserved for 20 days.
Draft MOA & AOA: Prepare the MOA and AOA, which define the company’s objectives and regulations. Ensure they comply with the Companies Act, 2013.
Obtain Consent and No Objection: Obtain consent from all existing partners or proprietors to convert the business into a Private Limited Company. Ensure there are no objections from creditors or other stakeholders.
File Incorporation Application: File the SPICe (Simplified Proforma for Incorporating Company Electronically) form with the Registrar of Companies online. Submit the MOA, AOA, and other required documents.
Pay the Required Fees: Pay the incorporation fees based on the authorized capital of the company.
Certificate of Incorporation: Upon verification of the application and documents, the ROC will issue a COI, officially recognizing your Private Limited Company.
Obtain PAN and TAN: Apply for a Permanent Account Number and Tax Deduction and Collection Account Number for the newly incorporated company.
Transfer Assets and Liabilities: Transfer all assets, liabilities, bank accounts, and contracts of the proprietorship to the newly formed Private Limited Company.
Update Registrations and Licenses: Update all relevant registrations, licenses, and permits with the new company name and details.
Compliance with Taxation Laws: Ensure the new Private Limited Company complies with all tax regulations and completes necessary tax registrations.
Inform Stakeholders: Inform customers, suppliers, creditors, and other stakeholders about the conversion to a Private Limited Company.

Benefits of Conversion

Limited Liability: Shareholders enjoy limited liability protection, safeguarding personal assets from business liabilities.
Separate Legal Entity: The Private Limited Company is a separate legal entity, ensuring business continuity and stability.
Enhanced Credibility: Conversion to a Private Limited Company boosts credibility among clients, suppliers, and financial institutions.
Access to Funding: Private Limited Companies have better access to funding options, facilitating growth and expansion.
Tax Benefits: Different tax structure with potential tax savings and access to tax incentives and deductions.
Transfer of Ownership: Ease of transfer of ownership through buying and selling of shares, ensuring business continuity.
Brand Recognition: Private Limited Companies tend to have a more established brand image, attracting more customers and opportunities.
Employee Stock Options (ESOPs): ESOPs can be offered to attract and retain top talent, providing employees with a sense of ownership.
Better Management Structure: Well-defined management structure with directors and shareholders, enabling effective decision-making and governance.
Contractual Advantages: Better contractual opportunities, as many businesses prefer dealing with corporate entities for credibility and reliability.

Why BizReg?

Unlock limitless growth potential with a Private Limited Company Structure. Convert your sole proprietorship into it with our expert assistance. Enjoy seamless online process with complete MCA filing support.