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How Does Converting Your Sole Propreitorship Into A Private Limited Company Work?

Converting your company from a Propreitorship to Private Limited offers you benefits such as restricted liability and a better window to gain a bank loan.

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  Proprietorship to Private Limited Company

As the proprietorship has almost no definition, besides that given to it by one of the many licenses you can take to get one (SSI or GST registration, for example), transferring the business to a private limited company is easy. All you need to do is go ahead and start a private limited company and submit an agreement between the sole proprietor and the private limited company, declaring that all the assets are to be transferred to the latter

  Advantages of Private Limited Company

Businesses often need to borrow money. In structures such as General Partnership, partners are personally liable for all the debt raised. So if it cannot be repaid by the business, the partners would have to sell their personal possessions to do so. In a private limited company, only the amount invested in starting the business would be lost; the directors' personal property would be safe.

  Regulations Under The Shops & Establishment Act

Enrollment is an unquestionable requirement for all foundations and business people, including owners working and maintaining a business from their homes. An enlistment, for example, proves to be useful when the proprietor wants to apply for a loan, or create a current bank account.

   Documents required for Shops & Establishment Registration:

Shop or Business Address Proof

ID Proof

PAN Card

Payment Challan

Additional business licenses necessary to start a business

   Process for changing or renewing the Shop and Establishment registration online under the Act

Each individual needs to apply for Registration renewal within the 15 days of the date of expiry. The below steps can be followed in order to renew the Shop and Establishment registration license online.

   Process for cancelling the license registration

The following is the procedure, in case you are looking to cancel your shops and establishment Act license.

   Important Elements Of Tamil Nadu Shop And Establishment Act

The following are some of the vital elements that the Tamil nadu Shop and Establishment Act covers.

FAQs on Shops & Establishment Act

To recognize each employee, the ESI scheme allots a unique identification number to every worker. This number is called the insurance number and is used for all operational purposes.

The law of India states that it is mandatory for every employee to register within ESI. It is considered a statutory responsibility. A factory or establishment has to apply for the scheme within 15 days from the date it becomes eligible.

Once a factory or establishment is recognized within the ESIC Act, it has to file ESI returns two times per year. For each return filed, the underlying documents have to be submitted:

ESI forms can be filled online but they require exact information with no buffer for mistakes. Additionally, the application is long and exhaustive and requires meticulous attention to be filled accurately. At Vakilsearch we ensure that no error is made and that the ESI registration is completed as fast as possible and with no glitches. We make the procedure seamless and smooth for you.

Learn the benefits of ESI scheme registration

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