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.