Conversion Sole Proprietorship
As a business develops, the requests of business and the downsides of an ownership firm could constrain a business person to begin the procedure for converting ownership into private limited company. A private limited company offers considerable benefits over the ownership type of business, including that of constrained obligation, capacity to draw in fair capital, constant presence and so on. In this article, we take a look at the prerequisite and methodology for change of ownership into a private limited company.
All the assets and the liability of the Sole Proprietory concern relating to the business immediately before the succession become the assets and the liability of the company.
The shareholding of the sole proprietor in the private limited company is not less than 50% of the total voting power in the company and his shareholding continues to remain so for a time period of 5 years from the date of the succession.
The sole proprietor does not receive any benefit or consideration, directly or indirectly, in any form or manner, other than by way of allotment of shares in the company.
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