The demands of business and the disadvantages of a proprietorship firm may push an entrepreneur to begin converting the proprietorship into a private limited company as the business grows. A private limited company has several advantages over a sole proprietorship, including limited liability, the capacity to raise equity capital, and the ability to stay in business.
• A certified copy of the financial statement
• A copy of the ITR
• Passport Size Photograph
• PAN Card
• ID Proof (anyone)
Aadhar Card/Voter ID /Driving License /Passport.
• Address Proof
Bank Statement/Electricity Bill /Telephone Bill / Mobile Bill
• If Property Owned by Directors /Shareholder
• Sale Deed of Property
• NOC from the Owner (format given by our company)
If you've rented a property, you'll need a letter of authorization from the owner (format given by our company)
• Rent Agreement
• NOC from the Owner (format given by our company)
A Private Limited Company (PLC) is a legal entity that exists independently of its directors and members.
A company's costs and revenues can be deducted from a variety of allowances and tax-deductible expenses.
There are more accessible methods for a business to borrow money; it can issue both secured and unsecured debentures, and banks and financial organizations like to lend large sums of money to businesses. In addition, a corporation has more borrowing possibilities than a sole proprietorship.
In the case of a loss in a sole proprietorship, the owner's assets are in danger. In the case of companies, however, only the company's assets are utilized to pay off the debts if the business becomes insolvent or is ended up. Because the corporation is a separate legal body, the directors and stockholders of the corporation have no personal liability.
• All of the Sole proprietorship's assets and liabilities are connected to the business immediately before the succession becomes the company's assets and liabilities.
• The sole proprietor's interest in the private limited company is at least 50% of the overall voting power in the firm, and his shareholding remains at that level for a period of 5 years after the succession.
• Other than the allotment of shares in the corporation, the sole proprietor receives no advantage or consideration, directly or indirectly, in any kind or manner.
• There must be at least 2 shareholders.
• A minimum of 2 directors is required.
• DSC and DIN is necessary for all directors.
Contact a TaxDraw professional to convert a proprietorship to a private limited company.
After getting a Director Identification Number (DIN) from the Indian government, any foreign individual can become/act as a director.
Anyone interested in becoming a company director must apply for a Director Identification Number (DIN). It is an 8-digit unique identification number allotted by central government.
The minimum capital necessary to run a private corporation is not set in stone.
No, a private limited business cannot invite the general public to invest in the company's stock.
Yes, in a private limited company, the directors and shareholders might be the same person.
A PLC should have at least two directors and a maximum of fifteen.
