Most entrepreneurs start a business with a vision of making it big. However, they begin the business as a sole proprietorship due to simple compliance requirements. It means when the business establishes itself and experiences a boom, you may consider transforming it into a private limited company with less liability. A business with more revenue can restrict the liability and bank attachment with the move of converting it into a private limited company.
This move can also impact tax filing. You can take steps to convert proprietorship to private limited company in compliance with the Companies Act of 2013. It makes your business a separate legal entity. It reduces the liability risk and the personal assets can remain safe from fraud.
When you choose to convert proprietorship to Pvt Ltd, your company shares remain private. Also, you must file taxes under the 1961 income tax act. It differs from the sole proprietorship where the income generated by your business comes under individual income during tax filing. We offer you guidance to complete the complex conversion and safeguard your business. Legal Dev can assist you in each step needed to make your business a private limited company.