Convert Sole Proprietorship to Private Limited

Stand on Your Own with Private Limited Company

Convert your sole proprietorship into Private Limited Company with TrademarkBazaar and puts your business growth on the right track.

Convert Sole Proprietorship into Private Limited Company

A large number of people give wings to their dream of having their own business through a Sole Proprietorship due to lesser compliance requirements associated with it. In future, when the business grows, there comes a need to separate the bank accounts and the tax filings of the Sole Proprietor and of business. The best possible solution for such types of businesses is to covert the Sole Proprietorship into a Private Limited Company.

Procedure for conversion of Sole Proprietorship firm into Private Limited Company:

  • All the shareholders are required to have DSC).
  • Apply for DIN: The directors need to apply for DIN.
  • Upload form with Registrar of Companies (ROC) : A completed application is required to be filed using the Form INC-32 Spice. E Form INC-32 Spice with INC 33 and INC 34 deals with the one single combined application for booking of name, incorporation of a new company and/or application for allotment of DIN. This e Form is accompanied by supporting documents including details of Directors & subscribers, MoA and AoA etc. Once the e Form is filed and found satisfactory, company gest registered. Also DINs are issued to the proposed Directors who do not carry a valid DIN. A maximum number of three Directors are allowed for using this combined form for the allocation of DIN while setting up a company.
  • Further attachments to this conversion would be the following;
  1. Affidavit by the Sole Proprietor
  2. Statement of Assets & Liabilities as on date by Chartered Accountant if the proprietorship is doing business from long
  3. Income Tax Returns Acknowledgement
  4. PAN Card of the Sole Proprietor
  5. Sales Tax Registration Number
  6. Any other Proof showing the name of the Proprietorship firm

It is imperative to keep in mind that if you wish to have the same name of the Company running under the new Private Limited Company, it is suggested to furnish the proofs of the old name such as LOGO trademark receipt, Sales Tax Registration documents, etc., so that the same name can be allotted again. Perhaps, if the old name has not been obtained by any Private Limited then, you can register the old name again.

Benefits associated with a Private Limited Company :-

There are various benefits associated with a Private Limited Company including:

Limited Liability of Partners

Borrowing money is an integral part of any business. In case of Partnerships, partners are held responsible for all the incurred debts. Therefore, business funds can’t be used for repayment, the partners would need to sell their personal properties for that purpose. In a Private Limited Company, the amount invested in business setup would be lost only; the director’s personal possessions would be safe.

Improved Debt-securing Capacity

A private limited company carries more options for securing debt as compared to LLPs.

Investment-friendly

Private limited companies can easily choose to get equity funding due to a clear distinction between shareholders and directors along with limited liability.

Conditions for Conversion from Sole Proprietorship to Private Limited Company ;-

  • All the assets and the liabilities of the Sole Proprietorships become the assets and the liabilities of the Private Limited Company before the succession.
  • The shareholding of the sole proprietor in the private limited company won’t be less than half of the total voting power in the company and his shareholding would remain same for a time period of 5 years from the date of the succession.
  • The sole proprietor does not get any form of benefit or deliberation, directly or indirectly other than through allotment of shares in the company.

Trademark Bazaar provides full-fledged assistance to sole proprietorships in regard to their conversion into a Private Limited Company. We have a team of qualified professionals who employ the best possible way to make this conversion faster and successful.

Frequently Asked Questions

 

Is the presence of 2 directors is mandatory in a Private Limited Company Registration?

Yes. There should be a minimum of two directors for a Private Limited Company. In case of sole ownership, registering for One Person Company is a feasible option.

Who can be a member of a Private Limited Company?

Any individual/organization can become the member of the Private Limited Company including foreigners/NRI.

Does one need to be present during the conversion of Proprietorship into private limited company?

Now days, the conversion application can be made online and there is no need to be present at our office.

 

Do you have any Question? Call us on +91-8882-312-312