Frequently Asked Questions
Q1. What is a Sole Proprietorship?
A. A Proprietorship Company, famously known as a Sole Proprietorship company, is a type of business that a single person owns.
Q2. What are the features of a Sole Proprietorship?
A. In a sole proprietorship, there is no legal distinction between the owner of the business and the business. Therefore, the owner is in direct control of all aspects related to the business, is accountable for its functioning, and wholly owns its profits or losses.
Q3. What do you understand by a Private Limited Company?
A. A private limited company, famously known as LTD, is a privately held company. In a Private Limited Company, the business limits owner liability to its shares and limits the number of shareholders to 50. It also restricts shareholders from trading shares publicly.
Q4. What are the advantages of converting to a Private Limited Company?
A5. Advantages of converting to a Private Limited Company are:
- Liability of shareholders limited to their shares
- No Takeover risks involved
- Perpetual Existence
- Raising capital is easy
- Tax Exemptions
- Can cater to a large enterprise
- Ease of Management
Q6. Can I convert Sole Proprietorship to a Private Limited Company?
A. Yes. You can connect with the Registrationwala.
Q7. What pre-conditions must be observed by a proprietor looking to convert to a Private limited company?
A. Before you convert your Sole Proprietorship into a Private Limited Company, you must ensure to fit the following criteria:
- At least two directors required
- At least two shareholders required
- Consent of everyone proprietor once held debt to
- Up-to-date financial documents
Q8. What documents are required for converting a Sole Proprietorship to a Private Limited Company?
A. How to convert a Sole proprietorship to a Pvt Ltd company? While filing an application for proprietor conversion to a Private Limited Company, the following documents must be attached with it:
- A written agreement of conversion
- Digital Signature Certificate (DSC) of all directors
- Director Identification Number (DIN) of all directors
- Altered Memorandum and Articles of Association (MOA/AOA)
- Form 32 – For change in a Board of Directors
- Form 18 – Notice of the situation of the registered office
- Form 1 – Validate the name availability
- Power of Attorney (POA)
Q9. How to convert Sole Proprietorship into a Private Limited Company?
A. The process to convert a Sole proprietorship to a Pvt Ltd company is as follows:
- Completion of slump sale formalities
- Appoint another director(s)
- Appoint the DIN and DSC for the directors
- Reserve the name using the RUN app
- Draft Memorandum of Association and Articles of Association
- File for company incorporation
- Obtain the Certificate of Incorporation
- Get the PAN and TAN of your newly formed company
- Make modifications to your bank details
Q10. How can Registrationwala help you in changing your Sole Proprietorship to a Private Limited Company?
A. We at Registrationwala provide end-to-end solutions for conversion from a Sole Proprietorship to a Private Limited Company. Our services include:
- DIN, DSC & Name Approval
- Submission of Form
- Reviewing the application and making changes if needed
- Obtaining the Certificate of Incorporation
- Assisting you in obtaining PAN and TAN,
- Further Assistance with maintaining your books