Conversion of Proprietorship into Private Limited Company
Introduction:
Due to a lack of compliance, people start their businesses as sole proprietors; as a company's business grows, it needs to fit the limitations of sole Proprietorship. With the development, it aims to meet the business world, and the shortcomings of a sole proprietorship do not meet its development; Thus, it gets converted into a private limited company. A Private Limited Company has many advantages over a Proprietorship.
To convert a sole proprietor into a private company, an agreement for the sale of his business must be signed between the sole proprietor and the newly incorporated private limited company. Such an incorporated Private company should mention in its Memorandum of Association that it has taken over a sole proprietorship. The sole owner of a Proprietorship should be made a part of the board of directors with voting right. The conversion can provide all the benefits to the company, such as higher capital, limited liability, etc. Converting a proprietorship to a private limited company brings many advantages but also a diffusion of power and a loss of independence. Therefore, a decision should be taken after carefully considering all the factors involved and seeing whether it is about the intended privileges.
Are you planning to convert your Proprietorship to a Private Limited Company in India? Then you are in the right place. Use Vakilkaro to hire the best lawyer in India to convert Proprietorship into a Private Limited Company. Vakilkaro will help you to convert your Proprietorship to a Private Limited Company.
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