Convert Proprietorship to Private Limited Company
Do you want to set up a Private Limited Company? There's nowhere else to look! Our knowledgeable CS Assisted service has the most affordable price, no additional costs, and an open pricing structure. Receive quick response times and a simple signup process. More than 8,000 entrepreneurs entrust classictrademark.in with the launch and legal compliance of their companies!
Served Over 8000 Startups and MSMEs
4.6/5 Google Review
A policy of 100% satisfaction guaranteed
Expert Consultation
INTRODUCTION
Conversion from Proprietorship to Private Limited Company
As businesses grow and evolve, upgrading from a sole proprietorship to a private limited company becomes a strategic decision for long-term success and scalability. A sole proprietorship, while simple and cost-effective to start, has limited capacity for expansion, fundraising, and liability protection.Converting your proprietorship into a Private Limited Company not only provides a separate legal identity to your business but also enhances its credibility, allows access to external funding, and limits the personal liability of shareholders. This transformation brings your business under the purview of the Companies Act, 2013, ensuring better governance and structured management.At Classic Trade Mark Office, we help business owners seamlessly navigate the legal, procedural, and documentation requirements involved in the conversion process, ensuring full compliance with the Ministry of Corporate Affairs (MCA).
Advantage
Advantages of conversion from Sole Proprietorship to Private Limited Company
Separate Legal Existence
A Private Limited Company enjoys a distinct legal identity, independent of its owners (shareholders/directors). It can own assets, enter into contracts, and initiate legal proceedings in its own name. This separation ensures that the company's operations and liabilities do not impact the personal assets of its members, providing a robust legal shield to the owners.
Limited Liability of Owners
One of the key benefits of converting to a Private Limited Company is limited liability protection. In case of any financial debts or legal disputes, the liability of shareholders is limited to the unpaid amount on their shares. Personal assets of directors or shareholders remain protected, unlike in a sole proprietorship where the proprietor bears unlimited liability.
Easy Transferability of Ownership
Ownership in a Private Limited Company is easily transferable by transferring shares to another individual or entity, subject to shareholder approval. This flexibility makes it easier to induct investors, transfer control, or exit the business, which is not feasible in a sole proprietorship.
Uninterrupted Existence
A Private Limited Company enjoys perpetual succession, meaning the business continues to exist even in the event of death, incapacity, or resignation of its shareholders or directors. This continuity ensures long-term stability and operational consistency, unlike a proprietorship which dissolves with the proprietor.
A LIST OF DOCUMENTS
Documents Required for Conversion to a Private Limited Company
To convert a sole proprietorship into a Private Limited Company, the following documents are essential:
1. PAN Card
PAN cards of all proposed directors and shareholders are mandatory. In the case of foreign nationals, a valid passport may be provided instead.
2. Address Proof of Directors and Shareholders
Any one of the following self-attested documents is required for each director and shareholder:
Aadhar Card
Voter ID
Passport
Driver’s License
3. Photograph
Recent passport-size photographs of all directors and shareholders.
4. Proof of Registered Office Address
Latest utility bill (Electricity or Telephone) for the registered office address.
5. No Objection Certificate (NOC)
NOC from the owner of the registered office premises, authorizing the use of the address for the company’s registration.
6. Rent Agreement (if applicable)
A copy of the rent agreement is required if the premises are rented.
7. Income Tax Return Acknowledgement
A copy of the ITR acknowledgment filed by the sole proprietor to establish the existence and financial record of the existing business.
Convert Your Proprietorship into a Private Limited Company in 3 Easy Steps
Step 1: Quick & Simple Onboarding
Fill out a quick online questionnaire – it takes less than 10 minutes.
Submit basic details and required documents for the conversion.
Make a secure online payment through our trusted gateway.
Step 2: Expert Guidance at Every Step
Dedicated Relationship Manager assigned to guide you.
Digital Signature Certificate (DSC) procurement for all directors.
Company Name Reservation under RUN (Reserve Unique Name).
Drafting of legal documents including MoA (Memorandum of Association) and AoA (Articles of Association).
Complete assistance with incorporation formalities.
Step 3: Get Your Company Incorporated
Receive the Certificate of Incorporation from the Ministry of Corporate Affairs.
Company PAN & TAN delivered to your registered address.
Your new Private Limited Company will be ready in 12–15 working days
(Subject to Government processing time).
Step-by-Step Process of Conversion
Day 1
Apply for Digital Signature Certificates (DSC) for all proposed directors.
Day 2 – 4
Check name availability with MCA.
File Name Reservation application under RUN.
Reserve your company name.
Day 5 – 8
Draft MoA, AoA, and other incorporation documents.
Pay applicable Stamp Duty.
Get documents notarized, as required.
Day 9 – 10
File the company registration application with ROC.
Apply for Director Identification Numbers (DINs).
Submit applications for PAN and TAN of the new company.
Day 11 – 15
Await Government processing and final approval.
Frequently Asked Questions
Have questions before reaching out? Here are quick answers to some of the most common queries we receive about contacting us, consultations, and service inquiries.
To register a Private Limited Company, you must have:
A minimum of two members and two directors (can be the same individuals).
No minimum capital requirement to start; however, government fees are applicable based on an Authorized Share Capital, generally starting at ₹1 lakh.
A registered office address in India.
Digital Signature Certificate (DSC) and Director Identification Number (DIN) for all directors.
Yes, especially if you're looking to:
Build credibility and trust among clients, banks, and investors.
Scale your business and attract funding.
Operate with a professional image and a structured governance model.
Private limited companies are ideal for startups, service providers, and businesses looking to expand or seek funding.
Once incorporated, a Private Limited Company remains permanently valid, provided all statutory compliances (annual filings, meetings, etc.) are fulfilled.
Non-compliance may result in the company being declared Dormant or Struck Off. It can be revived within 20 years of such action.
A Private Limited Company must:
Hold Board Meetings every 90 days (quarterly).
Conduct an Annual General Meeting (AGM) every financial year.
File annual returns and financial statements with the ROC.
Maintain proper books of accounts, statutory registers, and minutes of meetings.
You can apply through the MCA portal using the RUN (Reserve Unique Name) service.
Provide two name choices with justification.
Ensure the names are unique, not similar to existing companies, and comply with Companies Act provisions.
Once approved, the name is reserved for 20 days.
All assets and liabilities of the proprietorship related to the business are considered to be transferred to the new company.
This could result in capital gains tax liability.
However, Section 47(xiv) of the Income Tax Act allows tax exemption on such transfers if:
The assets/liabilities are transferred immediately before incorporation.
The proprietor becomes a shareholder of the company.
The shareholding continues for five years, and no other benefit is received apart from shares.