Conversion of Proprietorship in Company
Many business people start their businesses as a Sole Proprietorship due to the low compliance requirements. As the business and the incomes grow, there is a need to separate the bank accounts and the tax filings of the Sole Proprietor and that of the business. To accomplish this separation a possible solution is to convert the Sole Proprietorship into a Private Limited Company.
Pre-requisites
Shop Act License or Equivalent license/NOC issued by the Gram Panchayat
Minimum Share Capital shall be Rs. 100,000 (INR One Lac) for conversion into a Private Limited Company
Minimum Share Capital shall be Rs. 100,000 (INR One Lac) for conversion into a Private Limited Company
Minimum Share Capital shall be Rs. 500,000 (INR five Lac) for conversion into a Public Limited Co.
Minimum 2 Directors (for Private Limited Co.) and 3 Directors (for Public Limited Co.)
The directors and shareholders can be same person
DIN (Director Identification Number) for all the Directors
DSC (Digital Signature Certificate) for one of the Directors
Procedure for Conversion of Sole Proprietorship firm into Private Limited Company
Obtaining Digital signature Certificate: Digital Signature Certificate is required to be obtained by any one of the director of the company.
Apply for DIN: The directors should apply for DIN.
Application in Form INC-29 to ROC for reservation of name, incorporation of a new company and/or application for allotment of DIN, accompanied by supporting documents including details of Directors & subscribers, MoA and AoA etc.
Also DINs gets issued to the proposed Directors who do not have a valid DIN. Maximum three Directors are allowed for using this integrated form for allotment of DIN while incorporating a company.
Affidavit by the Sole Proprietor
Statement of Assets & Liabilities as on date by Chartered Accountant if the proprietorship is doing business from long
Income Tax Returns Acknowledgement
PAN Card of the Sole Proprietor
Sales Tax Registration Number, if you have
Any other Proof showing the name of the Proprietorship firm
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