Proprietorship form of business is best suited for only small unorganized business. It is the easiest business type to start and operate with very minimal cost and regulatory compliances.

If any entrepreneur wants to grow to a larger scale of business, proprietorship firm is not the way. Larger the business, higher the profits and returns.

A single individual having own business can expand its resources by converting his small scale Proprietorship Firm into Company.

There are certain provisions/conditions needs to be fulfilled during conversion of proprietorship into private.

They are as follows:

  Sole proprietor becomes one of the directors of private company having not less than 50% of the total voting power.

  Minimum share capital of private company will be Rs. 1,00,000/-.

  Minimum number of directors will be 2 in case of private company.

  Both the directors of private company will be allotted DIN.

  All the assets and liabilities of proprietorship will become assets and liabilities of private concern.

  Incorporated private company should have "Takeover of sole proprietorship concern" as one of the objects in their memorandum of association.

Time taken for conversion is 15-20 days and it also depends upon documents provided by applicant and speed of approval by government.