Conversion of Sole Proprietor to Private Limited Company
If you are running a business under sole proprietorship, you would surely like to convert it into a private limited company. Now, the question arises here why you need to do so. Once the business grows, it is essential to take steps to limit the liabilities and reduce the burden of compliance on a single person. The best way out over here is to convert proprietorship to private limited company In this article, we look at the requirement and procedure for conversion of proprietorship into a private limited company.Document Requirement
- Copy of the PAN Card of the Directors
- Passport size photograph of Director
- Copy of Aadhar card/ voter identity card
- Electricity /water bill ( business place)
- Copy of Rent agreement ( if rented property)
- Copy of property Papers ( if owned property)
Requirements for Conversion
The proprietor should ensure compliance with the following requirements before beginning the conversion of proprietorship into company: • An agreement must be entered into between the sole proprietor and the private limited company for conversion. Know more about slump sale agreement. • The Memorandum of Association (MOA) of the Private Limited Company must include an object that states. • All the assets and liabilities of the sole proprietorship firm must be transferred to the private limited company. • The sole proprietor should be a part of the company’s directorial board with a voting power which constitutes to at-least 50% of that of the company. It may be noted that a private limited company must have a minimum of two directors. • The incorporation rules of a private limited company mandate the minimum share capital requirement to be Rs 1,00,000.Basic
₹ 12999/-
₹ 12999/-