Converting your sole proprietorship into a Private limited company is often a wise decision. Changing your existing structure of Sole proprietorship to a private limited company might help you to expand your business reach, have better access to various sources of financing, protect your personal assets, manage your liabilities, enjoy tax incentives and benefits given by Govt., attract more investors and approach quality talent for your company.
By converting sole proprietorship into a private limited company, one can enjoy advantages such as a separate legal entity, fewer liabilities as compared to Sole Proprietorship, tax benefits, unlimited reach to capital, less administrative burdens, and more market credibility.
In order to convert your Sole Proprietorship business structure into a Private Limited Company structure, an agreement has to be executed between the Proprietorship and the newly formed Private Limited company for the sale of the business. The Private Limited Company so incorporated must have “the takeover of a Sole Proprietorship Concern” as one of the objectives in its MOA.