Proprietorship to Private Limited Company

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Overview
Required Documents
Benefits
Process
FAQs

Overview

A Proprietorship is the simplest form of business structure in India. It is owned and managed by a single individual, making it easy to start and operate. However, it also comes with major limitations such as unlimited personal liability, limited funding options, and lack of separate legal identity. As the business grows, these limitations can restrict its expansion and credibility. That is why many sole proprietors choose to convert their business into a Private Limited Company.

A Private Limited Company (PLC) is a registered entity under the Companies Act, 2013 and offers limited liability protection to its shareholders. It is considered a separate legal person from its owners. This gives higher credibility, better access to funding, and greater growth opportunities. The conversion involves forming a new company and transferring the assets, liabilities, and goodwill of the proprietorship to the company. The proprietor becomes one of the directors and shareholders of the new company.

At BizGlobal, we provide end-to-end support to convert proprietorships into private limited companies. Our experts help you get Digital Signature Certificate (DSC), Director Identification Number (DIN), reserve company name, prepare Memorandum of Association and Articles of Association, and file incorporation forms with the Ministry of Corporate Affairs (MCA). We ensure the transition is smooth, legally compliant, and hassle-free so you can focus on scaling your business.

Proprietorship to Private Limited Company

Required Documents

REQUIRED DOCUMENT

Identity and address proof of proprietor and proposed directors
PAN and Aadhar of all directors/shareholders
Passport-size photographs of directors
Proof of business premises (rent agreement/ownership proof)
Latest utility bill of the business premises
Proposed company name options
Capital structure and shareholding pattern
No Objection Certificate (NOC) from the property owner
Existing business registration/GST certificate
Bank statement of proprietor

Advantage

Limited Liability Protection

In a proprietorship, the owner’s personal assets can be used to repay business debts. A private limited company offers limited liability, protecting shareholders’ personal wealth. They are liable ... View More

Separate Legal Identity

A private limited company is a separate legal entity from its owners. It can own property, enter into contracts, and sue or be sued in its own name. This gives the business higher credibility and lega... View More

Easier Access to Funding

Banks and investors prefer private limited companies over proprietorships because of their structured governance and credibility. It is easier to raise equity funding, get bank loans, and attract vent... View More

Perpetual Existence

A private limited company has perpetual succession, meaning it continues to exist even if the owner leaves, sells shares, or passes away. This continuity ensures long-term stability, unlike a propriet... View More

Better Business Image and Growth Opportunities

Private limited companies enjoy better trust among customers, vendors, and government agencies. This improves brand image, opens doors to large contracts, and helps in participating in tenders and gov... View More

CONVERSION PROCESS

Process to Convert a Proprietorship into a Private Limited Company

Obtain DSC and DIN for Directors

Apply for Digital Signature Certificate (DSC) and Director Identification Number (DIN) for the proprietor and other proposed directors.

Submit RUN & Draft MOA & AOA

File name reservation using the Spice + Part A form on the MCA portal. Prepare Memorandum of Association (MOA) and Articles of Association (AOA) describing the company’s objectives and internal rules.

File Incorporation Application

Submit Spice + Part B along with MOA, AOA, and other required documents on the MCA portal to register the company.

Transfer Business to the Company

Close the proprietorship bank account, open a company bank account, and transfer assets, liabilities, and registrations like GST and PAN to the new company.