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CONVERSION OF PROPRIETORSHIP TO COMPANY
Most of the People start their businesses as a sole proprietorship due to the low compliance
requirements and low cost with minimum headache. But As the business grow, there is a need
to separate the bank accounts of the sole proprietor and that of the business. To achieve this
separation a possible solution is to convert the sole proprietorship into a private limited
company.
To convert a sole proprietorship concern into a private limited company, an agreement has to be
executed between the sole proprietor and the private limited company (once it is incorporated)
for the sale of the business. Further, such private limited company so Incorporated must have
“the takeover of a sole proprietorship concern” as one of the objects in its Memorandum of
Association.