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Change in firm type.

Prapti (accountant) (59 Points)

25 January 2023

Hello everyone, we have small business which is proprietorship, I just want to know is it possible to change the type, i.e from proprietorship to LLP or Pvt ltd. If yes, what are the minimum requirements, and when can we survive as a Pvt ltd.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 25 January 2023

To form a private limited company from a sole proprietorship, the procedure is to first form the private limited company and then take over the sole proprietorship through a Memorandum Of Association (MoA) and transfer all benefits and liabilities to the limited company.

Step 1: Application for DSC (Digital Signature Certificate).
Step 2: Apply for the DIN (Director Identification Number)
Step 3: Application for the name availability.
Step 4: Filing of the EMOA and EAOA to register a private limited company.
Step 5: Apply for the PAN and TAN of the company
Step 6: Issued certificate of incorporation by RoC with PAN and TAN
Step 7: Opening a current bank account on the company name.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 25 January 2023

A sole proprietorship cannot be directly converted into a LLP as it has only one person. It can be either done by closing the proprietorship and registering an LLP from scratch or by including another person in the business and making him a partner and then converting it to an LLP. Either way it would be a new LLP Registration only.

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