It is good practice to start of small in an unincorporated manner, but that does allow the business to scale up and reach maximum growth as the many of the features are missed out in a proprietorship firm. The features such as transfer of shares, limited liability, easy funding process etc are a major things a growing business must consider when they are exploring. Conversion of proprietorship firm to a private limited can be done by executing a proprietorship takeover agreement. A person can convert its sole proprietorship to pvt ltd under companies act, 2013 either forming a new company with takeover objects in its objects, else an existing company can takeover the proprietorship firm. All the assets and liabilities of the sole proprietorship firm gets transferred to the company as on cut off date. There are no tax implications when we convert proprietorship to pvt ltd as the same is exempted under income tax act subject to some conditions. At Unilex Consultants we provide you a hassle free conversion of sole proprietorship to pvt ltd which would be dealt by our professionals within a time frame of 10-15 days, subjective to governmental processing time. Our team takes care of the proprietorship to private limited conversion process and aids in provide you the realistic estimation of cost.
As the assets are already in the part of the company’s name there is no need of paying any exemplary stamp duty for the transfer of assets.
A private limited company will have more credibility and brand value in terms of the general public.
A private limited company would attract more investment and angel investors attention as a result the company would have more flow and progress.
The overall process for transferring is taxation free and can be done without any problems provided meeting the requirements.
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