Does a proprietorship is bounded to convert into Pvt. Ltd if certain condition occurs. For example i

MCA 123 views 2 replies

I am planning to start an export business and I am alone so I prefer to start as a Proprietorship but I have a few doubts:-

1) Does a proprietorship is bounded to convert into Pvt. Ltd if a certain condition occurs. For example, if annually a proprietorship earns 10 crores of Income or higher ?

2) Do a Sole Proprietor have a limit on having annual earnings and if it exceeds then they have to convert it to a Pvt ltd company? does a sole proprietorship have the compulsion to be converted to Private Limited on xxxx turnover or profit ?

3) Do a sole proprietor has an annual turnover limit ? or a sole proprietor can earn millions of millions being a proprietor and does not force by government law to be converted to a Private limited ? Here I am not asking when the proprietor is under compulsion to conduct an audit and submit to MCA but rather anything which abid a proprietor to convert to a private limited company.

 

Replies (2)
1)10 crores advisable to form pvt limited.
2)it's not the limit but convinient to perform and anxiously some legal bindings are there.
3)No annual turnover limit.
A business can be run as a proprietorship as long as your customer or vendor is fine with the nature of the organisation. For example some vendors or customers feel more comfortable doing transactions with a pvt ltd or Ltd company than proprietorship. Otherwise there are no turnover or profit limits.


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