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Proprietorship To Pvt. Ltd. Company

12450* Basic Package

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Overview

It’s simply impossible for a sole proprietorship to avail the entire advantage of the functionalities as it expands. This is the reason that the need to convert the proprietorship to Pvt Ltd Company is highly felt. There are various advantages, ranging from greater capital, nominal liability, etc.

At the same time, providing a range of advantages, conversion of proprietorship to Pvt. Ltd comes up with dispersion of power and lack of independence. This is the reason that it is considered essential for decision to be taken thorough post consideration of each of the aspects associated and ensuring whether it actually provides any kind of advantages associated.

Anyone prior to going for conversion of proprietorship to Pvt Ltd is essential to remain aware of the following aspects.

1. Norms for Conversion

1) It is essential for a takeover agreement; in other words, a sale agreement to be put in between the complete proprietorship and company.

2) It is essential for The Memorandum of Association of MOA to take-up the element “The takeover of a sole proprietorship.”

3) The entire assets and the responsibilities of the sole proprietorship is essential to get delivered to the concerned company.

4) It is essential for the shareholders of the proprietors not to be under fifty percent of the voting power, and this is essential to be continued for a period of a minimum of five years.

5) It is here to note that the proprietor does not get any extra advantage, be it about straightaway or indirectly. But, it has to be done only up to the share that has been held.

2. Ways of converting Proprietorship to Company

Mentioned below are the steps associated with the conversion of the proprietorship to the company when the following conditions are fulfilled.

1) It is essential for the proprietor to finish the slump sale procedures.

2) It is essential that the Director Identification Number or DIN and the Digital signature certificate (DSC) to be got through all the associated directors.

3) It is essential for the proprietor to fill application to ensure that there is a name in Form-1.

4) Make the MOA and AOA of the concerned company mentioning the objects and the norms of the same.

5) Do apply for incorporating the Company to Ministry of Corporate Affairs (MCA).

6) It is essential to submit the whole range of suitable documents.

7) Get the Certificate of Incorporation.

8) Do apply for updated PAN and TAN.

9) Do needful changes with bank details according to the conversion.

3. Essential documents meant for Conversion

One must possess the following set of documents for conversion.

1) Copy of PAN Card of all the directors as the identity proof.

2) In support of address proof, there must a copy of Aadhar card or voter ID.

3) There must be a passport size photo of Directors.

4) Upon owning, one must provide proof of authorization of business center.

5) Must submit rental agreement in case it is on rent.

6) There must be a proper No Objection Certificate of NOC of the concerned Landlord.

7) There must be proper documents in support of electricity bill or water bill.

It is essential to fill the right forms for submitting to the MCA. In this context, the following norms are essential to be followed.

1) It is essential for the Form 1 to get filed with the MOA, AOA and other documents.

2) Form 18 cites complete detail regarding the concerned registered office.

3) Form 32 provides details of the directors.

4.Fundamental needs for establishing a Private Limited Company

In order to set up a private limited company from a sole proprietorship, the method is to establish the Pvt. Ltd Company and then obtain the sole proprietorship through a Memorandum Of Association (MoA) and pass the entire benefits and liabilities to the concerned limited company. In this context, the following aspects are essential to be addressed prior to filing an application for a certificate of incorporation.

A) Directors:

For the establishment of a private limited company, it is essential that at least to have a team of two directors. Anyone of them can be the proprietor, whereas the other can be his/her relative or friend.

B) Director Identification Number:

It is essential for the director to have an Identification Number that is essential for the incorporation.

Shareholders:

The Company is essential to possess at least a couple of shareholders, and they can hold the same rank as of the directors. The authorization of the sole proprietorship is essential to be one of the directors of the limited company.

Capital:

It is essential for the company needs to possess a capital of at least 1 Lakh INR.

Advantages

Greater scope of generating capital

In case of a sole proprietorship, the venture is quite confined within the owner’s capital or the proprietor’s. On the other hand, a Pvt Ltd company holds every scope of generating funding and can make greater finance for growing the venture.

Limited responsibility

In case of a sole proprietorship, the liability lies with the concerned proprietor entirely. In fact, their complete assets also linked to pay back the creditors in case the loss occurs. But in case of Pvt Ltd, these liabilities get limited in terms of shares or warranties

Challenge of maintaining

A sole proprietorship is quite reliant upon only one person, which makes its reality get confined within the ability of the owner to function. On the other hand, the private limited company is a distinct legal entity and not confined within the establishment of a sole proprietor.

Challenge Burden

Necessities of a Pvt Ltd Company and its extent are way more valuable in comparison to that of the sole proprietorship; no matter it in regular continuation, the challenge has to be dealt as per the sole proprietorship turns much challenging for the concerned owner. But in case of Pvt Ltd, the venture is abided by the rules regulations and norms set by the Indian Companies Act.

Document Required

1. Documents of individual Shareholders (Directors and/or Nominee) :-

  • A) PASSPORT SIZE PHOTO
  • B) PAN CARD - self-attested photocopy.
  • C) ADHAAR CARD - self-attested photocopy.
  • D) ID PROOF - self-attested photocopy. any one of the following :-
    • Driving License or Voter ID or Passport
  • E) ADDRESS PROOF - self-attested photocopy. any one of the following :-
    • Electricity Bill or Phone/Mobile Bill orBank statement (1st and last page of passbook)

2. Documents required in case if any of the stakeholders is other than an Individual :- 

  • A) PAN CARD of Company - photocopy having round seal and signature of Authorized Person
  • B) Board Resolution / Letter of Consent
  • C) ADDRESS PROOF - photocopy having round seal and signature of Authorized person on any one of the following :-
    • Electricity Bill or Phone / Mobile Bill
  • D) Other Documents depending on case to case.

3. Documents of Registered Office :-

  • A) ADDRESS PROOF OF OFFICE/PLACE OF BUSINESS. Any one of the following :-
    • Electricity Bill or Phone / Mobile Bill
  • B) Other Documents depending on case to case.

Time Lines

  • (10 to 15 Days)
  • Purchase the Service
  • Upload / send the Documents
  • Discussion with expert
  • Filing of application with registrar authorities
  • Receipt of Registration Certificate
  • Confirmation to client

Service Covered

Pricing for what you want required service

Basic

12450*
  • Expert Consultation
  • 2 DIN Application (if DIN of directors are not available)
  • 2 DSC token, If required
  • Authorised Capital Rs. 1 Lakh 1
  • Incorporation Fee and Stamp Duty Fee 2
  • ESI and PF Registration
  • PAN and TAN
  • Professional Tax (if applicable)
  • Open a Current Account 3
  • Incorporation Certificate
  • MOA and AOA
  • Conversion Process

Business

14950*
  • Expert Consultation
  • 2 DIN Application (if DIN of directors are not available)
  • 2 DSC token, If required
  • Authorised Capital Rs. 1 Lakh 1
  • Incorporation Fee and Stamp Duty Fee 2
  • ESI and PF Registration
  • PAN and TAN
  • Professional Tax (if applicable)
  • Open a Current Account 3
  • Registration with GST
  • Registration with MSME
  • Share Certificate Hard Copy
  • Incorporation Certificate
  • MOA and AOA
  • Conversion Process

Enterprise

18450*
  • Expert Consultation
  • 2 DIN Application (if DIN of directors are not available)
  • 2 DSC token, If required
  • Authorised Capital Rs. 1 Lakh 1
  • Incorporation Fee and Stamp Duty Fee 2
  • Registration with GST
  • Registration with MSME
  • ESI and PF Registration
  • PAN and TAN
  • Professional Tax (if applicable)
  • Open a Current Account 3
  • Share Certificate Hard Copy
  • Incorporation Certificate
  • Commencement of Business Certificate
  • 3 months GST return filing upto 50 invoice per month
  • 3 months account upto 75 entries per month
  • 10 MOA / AOA
  • Conversion Process
  • Notes:
  • * This price is inclusive of all Govt filing fee and excluding GST amount.
  • 1. Additional authorised capital can be increased any time after paying additional stamp duty and other charges.
  • 2. Stamp duty additional required Rs. 7,500 in case of Madhya Pradesh, Rs. 3,000 in case of Kerala and Rs. 10,000 in case of Punjab state incorporation.
  • 3. Current Account will be choosen as per your preference.

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