conversion of sole trading into limited company

I want to convert a sole proprietorship into private limited Company.

What is a procedure and the applicapility of law and tax effect?

Thanks arpita Ji

Well it would be great if some more information I could get for converting Sole prorietorship concern into PRIVATE Company.

What would be the steps and what documents are needed.

Also how the business will be transferred.

And what would be the impact- TAX IMPLICATIONS ETC.?

Thanks & Regards

Bharti  

Thanks Arpita Ji,

But like Bharati Ji I would also like to know more about  converting Sole prorietorship concern into PRIVATE Company.

What would be the steps and what documents are needed.

Also how the business will be transferred.is there different way of transfering the business

And what would be the legal impliaction

Thanks & Regards,

Komal Jain

Dear Komal

A Sole Proprietorship firm can be converted into a Private Ltd. Company by way of a takeover.

For this what all you have to do is to execute a MOU between the proprietorship fim & the Company in which the value of firm shall be taken as consideration for takeover. If the consideration for takeover is to be discharged by way of allotment of shares, then F-2 or F-3 (depending upon the circumstances) shall be filed with the ROC in which copy of MOU shall be attached.

In case of takeover, no Capital Gain Tax is attracted.

thank you raspreet ji can u provide me complete checklist for different ways of converstion of solepropritor into pvt ltd co

Dear Komal

Sorry, i don't have the complete checklist for different ways.

But, as per my knowledge the other wayout is to make the Company, the proprietor of firm by way of purchase of complete business. A Company can be a sole proprietor of a firm & it is usually called a wholly owned subsidiary or division of a Company.

But in this case CG will be attracted.

In reply to Smt. CS Arpita ,

Madam,

Let me know under which provisions in companies act, 1956 talk about sole proprietorship. It talks about only Part IX companies not sole propreitorship.  In my opinion sole preprietorship will be treated as an individual. Hence It can form the company like individual but conversion is not possible.   If anybody has different view in this regard,  I welcome but,  but give your valid evidence to that. 
 

Please Send the detailed procedure of conversion of proprietory firm to a company

Under part IX a partnership firm can be converted into company. So no need to execute separate conveyancing for immovable properties. Now the properitorship firm if converted first into partnership firm, then getting the partnership firm registered, then applying for approval of name with conversion of this partnership firm into company, the purpose can be solved

Hai.. please give me an answer for the following query

" X  Pvt Ltd company want to take over Y a propreitory  concern where the director of X Co is the propreitor". Tell me the procedure for taking of the propreitoryship firm.

You cannot convert proprietorship concern into company. However a company can  take over the business carried by a sole proprietorship.  For this  you need to incorporate a company following usual formalities viz., getting the name approval by filing Form 1A and then within 60 days of name approval filing Form 1 for Incorporation alongwith MOA, AOA, Form 18 , Form 32  and Power of Attorney.

However  in the main object clause of MOA specify taking over the business of M/s. ....................(Proprietorship name) as one of the main objects. That is sufficient.