Convert proprietorship into Private Limited
People start their businesses as a sole proprietor because of less compliance but as the business grows sole proprietor needs separate bank account for their business transactions, to complete all his requirements the immediate possible solution is conversion of proprietorship into private company.
Private Company incorporation is done as per the procedure provided and includes:
- Apply for DSC and DIN of applicant
- File name approval form with ROC
- File incorporation form with ROC
- Apply for separate PAN of company
Requirements for Conversion:
There are certain provisions/conditions needs to be fulfilled during conversion of proprietorship into private.
They are as follows:
- Sole proprietor becomes one of the directors of private company having not less than 50% of the total voting power.
- Minimum share capital of private company will become Rs. 1,00,000/-.
- Minimum number of directors will become 2 in case of private company.
- Both the directors of private company will be allotted DIN.
- All the assets and liabilities of proprietorship will become assets and liabilities of private concern.
- Incorporated private company should have "Takeover of sole proprietorship concern" as one of the objects in their memorandum of association.
Time taken for conversion is 15-20 days and it also depends upon documents provided by applicant and speed of approval by government.