Convert Partnership to Private Limited Company Service in Kerala- BookMyTM

Convert Partnership to Private Limited Company

Why Convert to Private Limited Company from Proprietorship?

Most of the business in starting phase preferred to register as a Proprietorship firm because of its lower compliance requirements. With the growth of the business, it is advisable to take action to limit the liabilities and reduce the burden of compliance on a single person, for the same the best option is to convert the proprietorship firm to a Private Limited Company. For converting a proprietorship firm to Private Limited Company, promoters of the company must have enter to an agreement which is to be made for selling the business. The conversion from proprietorship to Private Limited Company must have clearly mentioned in the Memorandum of Association as ‘Takeover of a proprietorship firm’.

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Benefits of Conversion from Proprietorship to Pvt. Ltd Company

Easy Fund Raising

Private Limited Company registration process is stringent enough to make this structure credible among others which make fundraising or borrowing from external sources easier. The organization itself provides a number of ways to raise funds in the form of private equity, ESOP, and more.Show Less

Separate Legal Existence

Once the Company registration in India is done, a legal entity is born in eyes of law. This separates itself from its owners and managers. The company can operate on its own name simply by opening a bank account to own assets and enter into contract with parties. This also provides right to sue third parties in case of any defaults.Show Less

Owners’ Limited Liability

The company’s obligation or debts of does not create a charge over the owner’s personal assets. Their liability stays limited only to the capital subscribed and unpaid by them.Show Less

Management and Ownership Separation

The separate ownership and management help both – the company and the management to focus on their potential works. The shareholders assign responsibility to operate and run the company without losing control in the form of voting.Show Less

Documents Required to Convert Proprietorship to Private Limited Company

PAN Card

PAN Card of shareholders and Directors

Passport

Foreign nationals must provide a valid passport.

Identity Proof

Aadhaar card and Voter ID/ Passport/ Driving License of Shareholders and Directors

Director’s Address Proof

Latest Telephone Bill /Electricity Bill/ Bank Account Statement of Shareholders and Directors

Photograph

Latest Passport size photograph of Shareholders and Directors.

Business Address Proof

Latest Electricity Bill/ Telephone Bill of the registered office address

NOC from owner

No Objection Certificate to be obtained from the owner(s) of registered office

Rent Agreement

Rent Agreement of the registered office should be provided if any

Notarization

In case of NRI or Foreign National, documents of director (s) must be notarized

Formulation of Company Name

Build a Unique Identity

Identification plays an important role in making a business outstand in competitive market, build a unique and distinctive name for your business hence enhance your brand’s trust and value. Consumers should identify activity of your business from the brand name so that they can relate your business with its offerings.
Even though it meets all the above criteria, once again make sure that the brand name to be short, easy to remember and simple to pronounce or spell.

Constitution Type

Name of the company must end with “Private Limited” (Pvt.Ltd) as a suffix

Convert Proprietorship Firm to Pvt. Ltd Company in 3 Easy Steps

Step 01

Fill up the registration form

Select any package suits your requirement
Fill up the form which will take less than 10 minutes
Make payment through secure payment gateway.

Step 02

BookMyTM is Here to Help

Your queries will be answered quickly and effectively
Provide details & upload documents required for Pvt. Ltd Company registration
Procurement of Digital Signatures (DSC)
Application for company name registration
Documents drafting including MOA and AOA

Step 03

Your Private Limited Company is incorporated.

Certificate of Incorporation
Application for PAN and TAN

All it takes 10 to 16 working days*.
*Subjected to Government Processing Time.

The Process of Convert Proprietorship to Private Limited Company

Day 1 - 2

Collection of Information
Collection of required documents (Scanned copies)
Review of documents and information provided
Application for Digital Signature (DSC)

Day 3 - 7

Checking the availability of Name
Finalizing the name with the directors
Drafting MoA, AoA & Other required documents
Review and confirmation form directors

Day 8 - 10

Name Reservation under SPICe
Filing company registration application
DIN allotment application
Application for PAN and TAN of company

Day 11 - 13

Name reservation application under SPICe
Filing company registration application
DIN allotment application
Application for PAN and TAN of company

Day 14 - 16

Your Private Limited Company is incorporated.
*Subjected to Government Processing Time

Frequently Asked Questions

1. What is the benefit of converting a Proprietorship to a Private Limited Company?

Converting a proprietorship to a private limited company offers limited liability protection, meaning personal assets are safeguarded against business liabilities. It enhances credibility with clients and investors, facilitates raising capital through equity, and ensures perpetual succession, allowing the business to continue despite changes in ownership or management.

2. Is it mandatory to register a Private Limited Company after conversion?

Yes, registration is mandatory under the Companies Act, 2013. The conversion involves incorporating a new private limited company with the Ministry of Corporate Affairs (MCA) and transferring the proprietorship’s assets and liabilities to it.

3. What are the key documents required for conversion?

Key documents include:

Identity and address proofs of the proprietor and proposed directors/shareholders.
PAN cards of directors and the proprietorship.
Proof of registered office address for the new company.
No Objection Certificate (NOC) from creditors, if applicable.
A sale agreement for transferring the proprietorship’s business to the company.
Digital Signature Certificate (DSC) and Director Identification Number (DIN) for directors.
Memorandum and Articles of Association (MoA and AoA).

4. How long does the conversion process take?

The conversion process typically takes 15-30 days, depending on document preparation, name approval by the MCA, and filing of incorporation forms like SPICe+ with the Registrar of Companies (RoC).

5. Will the business name change after conversion?

The business name can remain the same, subject to availability and compliance with MCA naming guidelines. The suffix “Private Limited” must be added to the name to reflect the new structure.

6. What happens to the assets and liabilities of the Proprietorship?

Assets and liabilities are transferred to the private limited company through a sale agreement. Proper valuation is required, and all debts or liabilities must be settled or accounted for during the transfer process.

7. Are there any tax implications during the conversion?

The transfer of assets may attract capital gains tax, depending on the nature of the assets and compliance with Section 47(xiv) of the Income Tax Act, 1961. Consulting a tax professional is recommended to ensure tax-neutral conversion where possible.

8. Can I transfer licenses and permits from the Proprietorship to the Private Limited Company?

No, licenses and permits cannot be directly transferred. They must be re-applied for under the new private limited company, following the procedures of the concerned authorities.

9. Do I need to inform existing clients or vendors about the conversion?

Yes, it’s advisable to inform clients, vendors, and stakeholders about the conversion to maintain transparency. Contracts, bank accounts, and business communications should be updated to reflect the new entity.

10. How can BookMyTM assist in this conversion process?

BookMyTM offers end-to-end support, including obtaining DSC and DIN, drafting the sale agreement, preparing MoA and AoA, filing MCA forms, and ensuring compliance with legal and tax requirements for a seamless conversion.