|Conversion of a Proprietorship Firm into Private/Public Company|
Small is beautiful but a small unincorporated organization led by an Individual cannot assume growth on large scale without corporatising itself. Conversion of a Proprietorship firm into a Company is known as Corporatisation. Corporatisation has its own advantages such as Limited Liability, Perpetual Succession, Transferability of shares, easy access to funds etc.
All the assets and liabilities of the firm immediately before the conversion become the assets and liabilities of the company.
No Stamp Duty
All movable and immovable properties of the firm automatically vest in the Company. No instrument of transfer is required to be executed and hence no stamp duty is required to be paid.
No Capital Gain Tax
No Capital Gains tax shall be charged on transfer of property from Proprietorship firm to Company.
Continuation of Brand Value
The goodwill of the Proprietorship firm and its brand value is kept intact and continues to enjoy the previous success story with a better legal recognition.
Carry Forward and Set off Losses and Unabsorbed Depreciation
The accumulated loss and unabsorbed depreciation of Proprietorship firm is deemed to be loss/ depreciation of the successor company for the previous year in which conversion was effected. Thus such loss can be carried for further eight years in the hands of the successor company.
The Proprietor receives consideration only by way of allotment of shares in company. The Proprietor share holding in the company in aggregate is 50% or more of its total voting power and continue to be as such for 5 years from the date of conversion.
|2||DIN Approved DIN is a pre-requisite for incorporation process|
|3||Pre- Name Application Search|
|4|| Application for Name Availability
|5||Representations before RoC on behalf of Promoters|
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