Conversion Proprietorship to Private Limited Company

Enlisting a company offers many benefits. A registered co. makes it genuine , clear and increases the truthfulness of your business.

• Guards from personal liability and protects from other risks and losses.
• Attracts more customers
• Procures bank funds and covered investment from reliable investors with comfort.
• Deals liability protection to safeguard your company’s assets
• Greater capital contribution and greater stability
• Increases the ability to grow big and expand
• Shareholders have a right to appoint the directors to act on behalf of him.
• Nothing like a sole-proprietorship, even after the death of directors/members of Company will exist without any differences.
• The shareholders and the directors will get complete immunity from being sued by the third party except personal issues.
• It attracts lower tax rates and subsidies under the Income Tax Act, 1961.

As per the norms of Company Act 2013, in order to incorporate any company to be registered in India, the following conditions have to be met:

Two Directors: A Private limited company must have at least two directors and at most, there can be 15 of the directors in the business, at least one must be a resident of India.

Unique Name: The name of the business must be unique. The submitted name should not similar with any prevailing companies or trademarks in India.

Minimum Capital Contribution: There is no lowest capital contribution amount for a company. A company should have an authorized capital of at least Rs.1lakh.

Registered Office: The registered office place of a co. does not have to be a commercial registered space/place. Even a rented home can be the registered office as long as NOC is obtained from landlord.

Memorandum of Association (MOA) In the objective clause of Memorandum of Association (MOA) there should be a phrase present ‘the takeover or acquisition of a sole proprietorship concern’.

Annual Returns: The private limited company should file an annual financial accounts statement and annual returns with the registrar of the company every year.

Conditions to be followed prior converting a sole proprietorship into a private limited company:

• After integrating a new private limited company, all the assets and liabilities of the former sole proprietorship will be completely transferred to the company.
• Even after the transformation takes place, the old sole proprietorship will hold 50% of shares in a current private limited company that is, 50% of the voting rights will be held by a sole proprietorship.
• The former sole proprietor will hold shares for a minimum period of 5 years from the date of incorporation of a new private limited company.
• Similarly, there will not be any financial consideration between a sole proprietorship and private limited company as it is a mere conversion, not a bargain.

1. Application for DSC (Digital Signature Certificate).
2. Apply for the DIN (Director Identification Number)
3. Application for the name availability.
4. Filing of the EMOA and EAOA to register a private limited company
5. Apply for the PAN and TAN of the company
6. Issued certificate of incorporation by ROC with PAN and TAN
7. Opening a current bank account on the company name.

Identity & Address Proof:

• Scanned copy of PAN card/passport
• Scanned copy of Voter’s ID/passport/driver’s license
• Scanned copy of latest bank statement/phone bill/electricity bill
• Scanned passport-sized photograph specimen signature

Registered Office:

• Scanned copy of the latest bank statement/telephone bill/electricity bill
• Scanned copy of rental agreement with notarization.
• Scanned copy of sale/property deed.

E-Form spice 32:
It is an incorporation e-form provided at the final stage of incorporation of a company. Here, all the mandatory details should be filled in this form and submitted along with the required documents:

• The Articles of Association
• Memorandum of Association
• Declaration by the subscribers and by the directors.
• A confirmation for the address of the office
• Two Months Utility Bills copy
• Certificate of incorporation of the Outer Country body corporate
• A resolution passed by the global Company
• A recommendation declared by the promotional Company
• The interest of the directors in from other entities
• Nominee’s assent
• Identity proof and residential address of the subscribers and the nominees
• Identity proof and residential address of Applicant 1,2 and 3
• The Declaration/Resolution of the unregistered companies
• Declaration in Form ‘INC-14’ and Form ‘INC-15’

The process of converting a sole proprietorship into Private Limited Company is a complete online process. Over time when business starts to grow it becomes necessary to reduce the burden of compliance on a single person. Hence, they best way out here is to convert it into Private Limited company.

And, this is what exactly ASA is here for, to assist to every step of the way. Our team of expert professional will guide you in every way possible. So that you can focus on to make your business more efficient and effective.

ASA representatives will help you in the procurement of DSC, Application of Name Registration, Drafting of all necessary documents like MOA & AOA and others.

We will take off the stress of all the paper work and will provide you with best the service.
It generally takes 12-15 working days for your Private Company’s registration.