Convert Proprietorship to Private Limited Company
Scale your business from Proprietorship to Pvt. Ltd Company to multiply business growth
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Conversion from Proprietorship to Private Limited Company
Initially, many businesses choose a sole proprietorship because of its low compliance requirements. As the business grows, it becomes essential to manage liabilities and reduce the burden of compliance on a single person. The best approach is to transition from a sole proprietorship to a private limited company. To achieve this, the business owners must draft an agreement detailing the transfer of the business. Furthermore, the conversion should be documented in the company’s Memorandum of Association, with “the acquisition of a Sole Proprietorship Concern” listed as one of its objectives.
Benefits of conversion from Sole Proprietorship to Private Limited Company
Separate Legal Existence
A private limited company operates as a separate legal entity, independent of its members. This framework enables the company to own assets, engage in contracts in its own name, and pursue legal action against third parties if disputes arise. Members (shareholders and directors) are protected from personal liability for the company’s debts beyond their individual shareholdings.
Easy Transferability
Ownership of the business can be transferred to an individual or another entity through the transfer of shares, with the consent of shareholders. This process is relatively simple, unlike in a sole proprietorship, where such a transfer is not allowed.
Limited Liability of Directors
In a private limited company, the personal assets of directors are safeguarded against any company debts. Only the capital invested in the company or its assets can be used to address outstanding obligations.
No fixed capital investment required
A private limited company operates as a distinct legal entity with perpetual existence. Unlike a sole proprietorship, it is not impacted by the death or departure of any member. The company persists regardless of changes in its membership.
Documents required for conversion to a Private Company
PAN Card
PAN Card of directors and shareholders Foreign nationals may provide passport
NOC from owner
No Objection Certificate to be obtained from the owner of registered office
Address Proof
Aadhar Card and Voter ID/ Passport/ Driving License of all directors and share holders
Rent Agreement
Rent Agreement of the registered office should be provided, if any
Photograph
Latest Passport size photograph of all directors and shareholders
Income Tax Returns Acknowledgement
the sole proprietor needs to submit an income tax return acknowledgment.
Business Address Proof
Latest Electricity Bill/ Telephone Bill of the registered office address
Need assistance? Don’t worry, experts are here to help!
Call us at: 1800 313 4151 or Email us: support@taxpen.in
Convert Proprietorship Firm into private ltd. company in 3 Easy Steps
1. Answer Quick Questions
- It takes less than 10 minutes to fill in our questionnaire
- Provide basic details & documents required for registration
- Make payment through secured payment gateways
2. Experts are Here to Help
- Assigned Relationship Manager
- Procurement of Digital Signatures (DSC)
- Application for Name Reservation
- Drafting Documents including MOA and AOA
- Certificate of Incorporation
3. Your Private Limited Company is Registered
- All it takes is 12-15 working days*
Process of conversion of proprietorship to Pvt. Ltd.
Day 1
- Application for Digital Signature Certificate
Day 2 - 4
- Checking Name availability
- Application for Name Reservation under “RUN”
- Reservation of Name
Day 5 - 8
- Drafting of MoA, AoA & other documents
- Payment of Stamp Duty
- Notarisation of required documents
Day 9 - 10
- Filing application for company registration
- Application for DIN Allotment
- Application for PAN and TAN of company
Day 11 - 15
- Government processing time