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Convert your Proprietorship into Private Limited Company and unleash the power of your entrepreneurship with the help of ComplyKart professionals easy and hassle-free

Package inclusion:

  1.  Best Consultancy by Expert CA

  2. Name Reservation

  3. Document Drafting for Company Registration

  4. Filing of FormINC-32, 33 & 34

  5. Post conversion compliances

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Proprietorship to Private Limited Company

What is proprietorship?

A kind of business structure in Indian market where an individual has overall control on his/her business without any peculiar legal rules and regulations. That’s why both the individual and his/her company is termed as single entity. A grocer, plumber, chemist and tutor come under the category of sole proprietorship. Here, the sole proprietor is not supposed to file an extra income return as all the assets and property belongs to him/her. This way, they become entitled to the tax credits reserved for individuals. This form of business is impeccable for limited products and demand for personalised services. Though they are the prime person in charge of their business but if any need occurs; they can also hire employees to help in perform contracts.

What is Private Limited Company?

A privately held small business entity is given the name of Pvt. Ltd. Company as per the provisions of the Companies Act, 2013. Only 2 directors can make this company operational in the market. The best part of this type of company is the limited liability of each member so in case of any financial problem the personal assets of the shareholders are not at risk. It carries less complexity and confusion in decision making and management. Where in case of death of the owner of the sole proprietorship, the company comes to closure but in Pvt. Ltd. Companies the life of the company keeps on existing forever. Here, the requirement of paid-up capital is minimum 1 Lakh.

Condition for conversion

All the assets and the liability of the Sole Proprietary concern relating to the business transferred of the company. Also, the sole proprietor should not hold 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. The proprietor should not receive any benefit or consideration, directly or indirectly, in any form or manner, other than by way of allotment of shares in the company.

Benefits of Private Limited Company

Single entity

The Companies Act, 2013 gives separate identity to the member and his company. This add one more advantage i.e. liability for repayment of debts and lawsuits incurred by the company lies on the company only and not on the individual

Increased credibility

‘Pvt. Ltd. Company’ status enjoys more assurance and credibility from its consumers than sole proprietorship and partnerships entity. This assured faith guarantees minimum growth.

Availability of funds

Though a Pvt. Ltd. Company can be formed with 2 directors only but if need arises, this number can go up to 200. Their governance with the Companies Act, 2013 offer them credit worthiness with various financial institutions. On the other side, it is quite difficult task for sole proprietorship to raise money.

Ownership

In this form of company, the owner has the right of choice to sell and transfer the shares of company to other people. Generally, shares of Pvt. Ltd. Companies are owned by a group of private investors or its founders.

Perpetual succession

In case of any bankruptcy, dispute among the members and death of any member; no changes occurs in the identity of the company in the market. It enjoys the advantage of perpetual succession despite any type of crisis.

Privacy is maintained

The law gives the advantage to keep legal settlements, executive compensation and other information secure for company use. This confidentiality plays an important role in attaining success in the market

Easy Growth road

A minimum number of two directors is required for registering the private limited company. So, it becomes easy to agree on any venture and new plan between the two. It paves the way for unlimited growth and more recognition in the market.

Procedure for Conversion

  • 1

    Obtaining Digital signature Certificate

    The process of conversion starts with acquire Digital Signature Certificate which is necessary.

  • 2

    Obtain DIN of Directors

    The Director Identification number is also required to be obtained by the Directors as it is a pre-requisite to have DIN to be appointed as a Director.

  • 3

    Obtain Name Approval

    Obtain the name approval by the Ministry of Corporate Affairs by filing RUN Form which is approved normally in 2 days

  • 4

    File Incorporation Form

    Once the name of the Company is approved, Form INC-32, 33 & 34 is required to be filed with mandatory documents and MOA & AOA of the Company.

  • 5

    Certificate of Incorporation

    Upon filing of necessary documents with the Ministry of Corporate Affairs, Certificate of Incorporation is granted within 4-5 days along with PAN & TAN numbers.

Documents required

  • PAN Card & Aadhar Card of the Directors
  • Colour Passport size photograph of Directors
  • Copy of Aadhaar Card/ Voter identity card
  • Copy of Rent agreement & NOC from Landlord

    • How ComplyKart can help you

    Consulting & Strategy

    Our conversion experts will give you the best consulting and prepare the strategy for conversion of your Proprietorship into Company.

    Client’s growth

    Our services are aimed at achieving growth for clients. We can provide necessary guidance for understanding the conversion process.

    Competence is our strength

    We make every effort to stay updated with the rules and regulations by MCA. This enables us to deal with client’s needs effectively.

    Always there for you

    The assurance of a dedicated workforce including support staff and managers can be a promising factor in the conversion process.

    Post Conversion Compliance

    Once the conversion is approved by the Authority you need to comply with certain rules which we help you to comply and keep it running.

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