Small is graceful but a small unincorporated company led by an personal cannot opine development on large level without corporatising yourself. modification of a Proprietorship firm into a Company is known as Corporatisation. Corporatisation has its own benefit such as easy access to funds, Transferability of shares, Perpetual Succession, Limited Liability etc.
Benefit:
- Automatic Transfer
All the property and accountability of the firm quick before the modification become the property and accountability of the company.
- No Stamp Duty
All floating and immovable properties of the firm directly pullover in the Company. No equipment of shifting is required to be executed and here upon no stamp duty is required to be paid.
- No Capital Gain Tax
No Capital avail tax shall be charged on transfer of assets from Proprietorship firm to Company.
- Brand Value
The credit of the Proprietorship firm and its brand price is kept virginal and sustain to delight the previous top story with a better lowful recognition.
Conditions
The Proprietor get idea only by way of allotment of shares in company. The Proprietor share keeping in the company in clan is 50% or more of its total polling power and sustain to be as such for 5 years from the date of modification.
Steps in Conversion of a Proprietorship firm into a private company or public company
| Step No. | Steps |
|---|---|
| 1 | DSC |
| 2 | DIN
DIN sanctioned DIN is a prerequisite for Deduction process |
| 3 | First Name Search for Application |
| 4 |
Application for Name Availability
|
| 5 | Representations before RoC on on the part of Promoters |
| 6 | Application to territorial director for clearance of License |
| 7 | Characterization before RD in case of any objections |
| 8 | Public Notice |
| 9 | Documents in need (after license issued by RD)
|
| 10 |
|
In case of NPO being a Public Limited Company | |
| 11 |
|
