Limited Liability Protection
Separate personal liability from business risk. Personal assets remain protected from business debts and legal claims.
Section 47(xiv) Income Tax Compliant
Solo Prop To Pvt Registration
Protect personal assets, raise equity funding, and transition your sole proprietorship business to a growth-ready Private Limited Company in 15 to 25 working days.
1,500+Conversions Assisted
4.8★Client Satisfaction
15-25 DaysExecution Time
FREE CONSULTATION
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SAMPLE
Fresh Certificate on Conversion
Ministry of Corporate Affairs (MCA) — sample conversion certificate
Illustrative sample. Your official certificate is issued after approval.
01
Business Transfer Agreement
Legal slumping/takeover of assets and liabilities.
02
Tax Exemption
Capital gains exemption under Section 47(xiv) of IT Act.
03
Min 2 Directors
Proprietor + 1 additional director/shareholder required.
04
GST Credit Transfer
Seamless transfer of unutilized ITC via Form GST ITC-02.
OVERVIEW
Transitioning Proprietorship to Private Limited Status
Converting an unregistered or GST-registered Sole Proprietorship into a Private Limited Company involves taking over the existing business operations, assets, and liabilities by a newly incorporated corporate entity through a formal Business Transfer Agreement (BTA).
This structural change grants limited liability protection to the sole proprietor, enables equity-based fundraising, and establishes a clear corporate structure without triggering capital gains tax if conditions under Section 47(xiv) of the Income Tax Act are met.
Governing ActCompanies Act, 2013 & IT Act, 1961
Tax Exemption ClauseSection 47(xiv) Income Tax Act
Minimum Members2 Directors & 2 Shareholders
Key AgreementBusiness Transfer Agreement (BTA)
GST Transfer FormForm GST ITC-02
KEY BENEFITS
Why Convert Your Sole Proprietorship?
Transform your personal business into an investor-ready corporate entity.
Raise Equity & Venture Capital
Proprietorships cannot issue shares. A Private Limited company can onboard investors and issue ESOPs to key talent.
Tax-Free Business Transfer
Transfer existing assets and liabilities without capital gains tax liability under Section 47(xiv) compliance.
ITC Credit Migration
Transfer remaining Input Tax Credit (ITC) from the old GSTIN to the new company's GST profile via Form ITC-02.
ELIGIBILITY CRITERIA
Section 47(xiv) Conditions & Requirements
| Criterion | Requirement | Remarks |
|---|---|---|
| Assets & Liabilities Transfer | 100% transfer of proprietorship assets/liabilities | All business assets must be transferred to the new Pvt Ltd. |
| Proprietor Shareholding | Minimum 50% voting power for 5 years | Sole proprietor must hold at least 50% shareholding for 5 years post-conversion. |
| Consideration Mode | Allotment of shares only | Proprietor must receive consideration solely as company shares, no direct cash payout. |
| Minimum Personnel | 2 Directors & 2 Shareholders | Existing proprietor plus at least 1 co-director/shareholder required. |
| Digital Signatures | Class 3 DSC for proposed directors | Required for name reservation and SPICe+ MCA filing. |
DOCUMENTS REQUIRED
Checklist for Proprietorship Conversion
1. Directors' Identity & Address Proof
PAN Card, Aadhaar, Passport/Voter ID, and recent bank statement of proposed directors.
2. Registered Office Proof
Electricity bill, property tax receipt, and No Objection Certificate (NOC) from the premise owner.
3. Business Transfer Agreement (BTA)
Duly drafted and stamped takeover agreement specifying asset and liability valuations.
4. CA Report & GST Statements
Chartered Accountant certificate confirming valuation and balance sheet of the sole proprietorship.
STEP-BY-STEP PROCESS
Conversion Workflow
1. DSC & Name Approval (RUN/SPICe+)
Obtain Digital Signature Certificates (DSC) and reserve the company name via MCA portal.
2. SPICe+ Filing & Incorporation Certificate
File SPICe+ Part B along with MOA, AOA, and AGILE-PRO-S to receive Certificate of Incorporation (COI), PAN, and TAN.
3. Business Transfer Agreement Execution
Execute the formal Business Transfer Agreement (BTA) taking over sole proprietorship assets and liabilities.
4. Bank Account & GST Migration
Open corporate bank account, apply for new GST registration, file Form ITC-02, and close old proprietorship filings.
WHY CHOOSE US
Why Corporate Mart?
Section 47(xiv) Tax Guidance
Our tax experts structure the asset transfer agreement to ensure capital gains tax immunity.
100% Online & Digital Process
Complete documentation, digital signatures, and filings executed online without visiting offices.
End-to-End Migration Support
Assistance extending beyond MCA incorporation to GST credit transfer (ITC-02) and vendor contract transitions.
Transparent Statutory Billing
No hidden charges. Clear separation between professional fees and actual MCA government stamp duty.
FAQ
Frequently Asked Questions
Yes, provided the name is unique and compliant with MCA Naming Guidelines. You can incorporate as "[Proprietorship Name] Private Limited" by issuing an NOC from the sole proprietor.
A new GST registration is issued for the Private Limited Company. The existing unutilized Input Tax Credit (ITC) is transferred using Form GST ITC-02, after which the old GST profile is surrendered.
A Private Limited Company requires a minimum of 2 directors. Since a proprietorship is owned by a single individual, you will need to add 1 additional director (e.g., family member or business partner).
