Sole Properitorship To Private Limited Company Package
Sole properitorship to Private limited company
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Sole properitorship to Private limited company in India
To convert sole properitorship to private limited company in india an agreement has to be executed between the Proprietorship and the Private Limited Company for the sale of the business.
Advantages of sole properitorship to private limited company in India
Organizations regularly need to obtain cash. In structures, for example, General Partnership, accomplices are actually at risk for all the obligation raised. So on the off chance that it can’t be reimbursed by the business, the accomplices would need to pitch their own belongings to do as such.A sole properitorship to private limited company in india, just the sum put resources into beginning the business would be lost; the executives’ close to home property would be sheltered.
Private limited organizations effectively suit value subsidizing as there is a reasonable refinement among investors and chiefs just as constrained obligation. Truth be told, financial speculators and private value reserves are probably not going to put resources into some other structure. This is on the grounds that LLPs would expect them to progress toward becoming accomplices in the business, while an OPC can have just a single investor.
A sole properitorship to private limited company in india has a greater number of alternatives for assuming obligation than LLPs. Not exclusively are bank advances simple to get (with respect to OPCs and LLPs), the alternative of issuing debentures and convertible debentures are constantly accessible to it.
Documents Required for sole properitorship to private limited company in india
- Copy of PAN Card of the Directors
- Passport size photograph of Directors
- Copy of Aadhaar Card/ Voter identity card
- Copy of Rent agreement(If rented property)
- Electricity/ Water bill (Business Place)
- Copy of Property papers (If owned property)
- Landlord NOC (Format will be provided)
Minimum Requirements for sole properitorship to private limited company in India
- Minimum 2 Shareholders for Private Limited Company Registration
- Minimum 2 Directors
- Minimum Rs.1 Lac Share Capital
- DIN for all Directors
Conditions for conversion sole properitorship to private limited company in India
- All the assets and the liability of the Sole Proprietory concern relating to the business immediately before the succession become the assets and the liability of the company.
- 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.
- The sole proprietor does 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.
Steps of conversion sole properitorship to private limited company in india
- Obtaing DSC and DIN for sole proprietor and new Director
- Acquiring permission for naming the Company which must be made in Form-1
- Apply to MCA for Incorporating the Company
- Completing the slump sale formalities
- Modifying details of bank account in accordance with the conversion
- Submission of relevant forms and documents
Certificate of Incorporation
After completion of all the procedures specified above, the MCA validates the prescribed compliance requirements.If the administering body find it satisfactory, the entity will be provided with a Certificate of Incorporation, which effectively gives birth to a Private Limited Company.