Sole Proprietorship to Private Limited Company
The law considers a sole-proprietorship business and its owner as the same person. Therefore, converting a sole-proprietorship to a company only means getting a fresh registration. Now, you can convert your sole-proprietorship to a company in two ways. That is, either as a private limited company or as a one person company (OPC).
Benefits of Converting Sole-Proprietorship to Company
Here are some benefits that you will get by converting your sole-proprietorship to a company.
- You will have limited liability.
- You and your business will be separate legal persons.
- Getting funds for your business will become easier.
- The company will bear the losses and not you.
- If you have a startup business, you may be able to get various benefits that government provides for startups.
Minimum Requirements to Convert Sole-Proprietorship to Company
Before you can convert your sole-proprietorship to company, please make sure that:
- There are at least two members (one for OPC).
- You have at least two directors (one for OPC and the sole member can also act as director).
- You have a share capital of at least Rs. 1, 00,000.
- Director Identification Number (DIN) for all directors.
Documents Required to Convert Sole-Proprietorship to Company
Below are the documents and details that you need for converting your sole-proprietorship to a company.
- PAN of all directors.
- Passport size photos of the directors.
- Proof of business address such as electricity or water bill, NOC from the landlord, ownership papers etc.
- An agreement between your proprietorship and company transferring all its assets and liabilities to the company.
- Digital signatures (DSC) of the director(s).
- ID and address proof of the landlord (if any).
Timeline to Convert Sole-Proprietorship to Company
The process of conversion usually takes around 35-40 days. This includes the time it takes to obtain DSC and DIN for the directors.
Fees to Convert Sole-Proprietorship to Company
The fee depends on the type and share capital of the company and starts from Rs. 2000. It further goes up with the amount of share capital. Please note that this fee does not include the fee for DIN or DSC and there is a separate government fee for both of them.
How PocketLawyer Can Help?If you need help with conversion of your sole-proprietorship to the company, you can find a one-stop hassle free solution at PocketLawyer.
At PocketLawyer, you can post your requirement and get the best price quotation of lawyers/professionals who are expert in Company Law and can provide you their best services at affordable price.
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