Convert Proprietorship to Private Limited Company in
3 simple steps, you get
- Documents Review
- Expert Guidance
- PAN & TAN
- DIN
- Digital Signature Certificate
- Name Reservation
- MOA/AOA
- Certificate of Incorporation
Let's incorporate your Private Limited Company!
Introduction
Converting a proprietorship into a private limited company is a strategic evolution that entrepreneurs often consider to unlock a new phase of growth and stability. In the entrepreneurial journey, the shift from a proprietorship, known for its simplicity and ease of setup, to a private limited company introduces a range of advantages.
This transformation not only brings the benefits of limited liability but also enhances access to funding, credibility in the market, and the overall robustness of the business structure. In this process, businesses position themselves for a more expansive and resilient future within the corporate landscape. Converting a proprietorship to a private limited company goes beyond mere formality; it entails embracing a more sophisticated business model that aligns with ambitious growth objectives.
In essence, converting a proprietorship to a private limited company is a multifaceted decision, representing a strategic pivot towards a more resilient, scalable, and credible business identity. It is a proactive step that lays the groundwork for a dynamic and flourishing future in the corporate landscape.
The whole process will be managed by a Certified Chartered Accountant and Company Secretary
Documents Checklist
We have compiled a detailed list of documents required to convert your Sole Proprietorship to Private Limited Company
Identity Proof
- Document Proof of Partners
- Notarized documents (For Foreign Nationals)
Other Documents
- Passport Sized Photograph
- NOC
Address Proof
- Utility Bill or Bank Statement
- Rental agreement if rented.
- Proof of ownership of a business place (if owned)
Forms to be submitted to MCA
- Form 1
- Form 18
- Form 32
process
Conversion Process
in 3 Simple Steps
At Bright Accounts, we have simplified the entire conversion process of a converting Sole Proprietorship to Private Limited Company into 3 simple steps. This makes your journey smooth, structured and easy.
- Pre-application
- We collect basic information
- Drafting MOA and AOA
- Incorporation Application to MCA
- Document Submission
- Completion of Slump Sale Formalities
- Drafting & Application
- Application for Name Availability (Form – 1)
- Drafting MOA and AOA
- Incorporation Application to MCA
- Document Submission
- Application for PAN and TAN
- Approval
- Receipt of Certificate of Incorporation
- Update Bank Details
After successful submission and verification you will be receive a Certificate of Incorporation which can then be used to open a new bank account or update details in an existing bank account.
benefits
What's Good
about converting Sole Proprietorship to Private Limited Company
Limited Liability Protection
Shareholders enjoy safeguarded personal assets, and their liability is confined to the extent of their investment, providing a secure financial environment and risk mitigation.
Transferable Ownership
Ownership transfer is facilitated through share transfers, streamlining business succession planning and creating avenues for selling or exiting the business.
Separate Legal Entity
Operating as a distinct legal entity with perpetual succession ensures stability, credibility, and seamless continuity during ownership or management transitions.
Tax Benefits and Incentives
Eligibility for tax deductions, exemptions, and reduced rates leads to substantial tax savings, contributing to improved profitability for the company.
Capital Accessibility and Funding Opportunities
Private limited companies improved access to capital by issuing shares, attracting investments for expansion, and supporting financial resources for sustained growth.
Effective Governance and Compliance
Stringent regulations promote good corporate governance, financial transparency, and accountability, thereby reducing legal and compliance risks for the company.
What do you get
when you work with Bright Accounts
Convert your Sole Proprietorship to Private Limited Company
When you convert your Sole Proprietorship to Private Limited Company with the help of Bright Accounts, you not only get the items mentioned on the side, you also get a friend who advices, guides and helps you grow into a great business.
- DIN & DSC
- Name Reservation
- Drafting of MOA and AOA
- Comany PAN and TAN
- Certificate of Incorporation
- Expert advice you can count on
- Our Bright support throughout the process
Why Bright Accounts
There are many reasons why clients choose Bright Accounts, but from our experience we have listed the four main reason why you should go with us.
Bright & Knowledgeable
Bright Accounts delivers high quality financial services by a team of bright and knowledgeable experts.
Always happy to help
Bright Accounts commit to provide dedicated support and assistance to our clients.
Professional & Approachable
We maintain a high level of professionalism while being easily approachable for our clients.
Easy & Quick
We focus on streamlining and simplifying the complex processes for our clients.
Prerequisites or Conditions
The following are conditions for Prerequisites for conversions of a Proprietorship to Private Limited Company
- A formal takeover or sale agreement must be established between the sole proprietor and the company to govern the terms and conditions of the transition.
- The company's Memorandum of Association (MOA) should explicitly include the objective of "The takeover of a sole proprietorship" to formalize and align with the intended business transition.
- All assets and liabilities of the sole proprietorship must be systematically transferred to the company, ensuring a seamless transition of the business.
- All directors must obtain a Director Identification Number (DIN)
- The proprietor's shareholding in the company should not fall below 50% of the voting power. This ownership stake must be maintained for a stipulated period of 5 years.
- The proprietor is prohibited from receiving any additional benefits, either directly or indirectly, beyond the extent of shares held in the company.
- A minimum of two directors is essential for the formation of a private limited company
- The company must have a minimum of two shareholders, who may also serve as directors
- The private limited company must have a minimum authorized capital of 1 Lakh rupees
Frequently Asked Questions
Yes, it is necessary to have a minimum of two directors in a Private Limited Company Registration.
The entire process is fully online, eliminating the need for physical presence at our office or any other location. Get in touch with Vakilsearch to know more.
A new bank account under the name of Private Limited Company needs to be opened and should close the one used for the sole proprietorship. Hence, all cheques and bank transfers must be made under the Private Limited Company.
An NRI or Foreign National can become a Director in a Private Limited Company by obtaining DIN. However, the Board of Directors must include at least one Resident of India.
Yes, any individual can start a company who is of Indian origin/Non Resident Indian( NRI)/ Overseas Citizen of India(OCI)/ Person of Indian Origin(PIO). Even any foreign nationals can also start a company in India with the mandatory documents. But there should be a minimum of 2 directors and a maximum of upto 200 directors.
Bought Together
There are many reasons why clients choose Bright Accounts, but from our experience we have listed the four main reason why you should go with us.
Private Limited Company Annual Compliances
Ensure seamless compliance for your Private Limited Company with Bright Accounts' Annual Compliance Services managed by experts.
Outsource Accounting & Bookkeeping
Save valuable time, money and labor by outsourcing your accounting and bookkeeping tasks to Bright Accounts experts.
Let's get your Trademark registered
Let's register your Trademark. Bright Accounts has experience in registering many Trademarks. Our process is simple, easy and hassle-free.