A sole proprietorship firm is a popular business structure for most small and medium traders/manufacturers/ service providers. However, there is no requirement of registration of any such firm under the extant laws in force. Furthermore, there is no provision for compulsory audit of a sole proprietorship firm. Therefore, as it grows in size, it becomes need of the hour for a business to evolve into a more trustworthy and transparent structure, such as Company. It has been observed that such structures are preferred by critical stakeholders (investors, creditors, etc.). Hence, various sole proprietorship firms seek to convert to a corporate structure. Certain relevant queries in connection with the same have been dealt below.
2. What are some key/ basic documents required for conversion of a Proprietorship Firm into a company?
- Particulars of members along with the proposed shareholding ratio
- Declaration of two or more directors verifying the particulars of all members
- Copy of Newspaper advertisement in prescribed format
- Relevant certification from a CA/CS/CWA; etc.
- Declaration/particulars as per DIR 8, DIR 2, 16(1), INC 9
- Bank Statement with current transactions
- KYC documents
- Electricity Bill, Rent Agreement, NOC by the owner of Registered office
- Dissolution Deed
- NOC unsecured creditors & secured creditors
- For the purpose of conversion of a sole Proprietorship Firm into a company at least two individuals are required, out of which one shall be the existing proprietor.
- Preparation of DSC and DIN of all proposed Directors
- Preparation and Filing of name application through web form RUN through MCA portal.
- Preparation and filing of E form URC 1, E form spice, E form Spice MOA &E form Spice AOA
- Appropriate Government fees is payable depending upon the authorized capital of the company.
- Issuance of Certificate of incorporation along with PAN and TAN.
4. What is the time period within which the Conversion of Proprietorship Firm into a Company can be completed?
* Terms & Conditions
The fee mentioned above does not include any govt fees, expenditure towards any newspaper advertisement, certification from any professional, preparation of Statement of accounts and accordingly kindly contact our executive to get an all inclusive fee quote