Conversion of pvt ltd company into proprietorship

Pankaj Arora (Learner) (3134 Points)

10 October 2012

Dear All

Pls let me know the process of conversion of private limited company into proprietorship?

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3 Replies

CA Lokesh Pokharna (CA (Ahmedabad Bhilwara Chittorgarh)) (4128 Points)
Replied 10 October 2012

winding up of company as per co. act

than make required accouting entries in the books of company & prop.

by this way conversion possible.

(Guest)

Dear Pankaj,

Conversion of a Private Limited company into a proprietorship firm is not possible.

I advise you to form a , proprietorship firm then sell the Private Limited company's undertaking to the proprietorship firm, then finally dissolve the company through usual process of law.

A Private Limited Company has all the advantages of a proprietorship firm with the additional benefits of limited liability (though there is unlimited liability under sales tax and in certain cases under income tax law for the directors), so the rationale for the proposed change is not understood to me. If possible, please explain...

Of course you have the obligation of conducting audit, filing annual returns and holding Board and General meetings. If the purpose is to avoid these recurring obligations, then the only way is to go for a Voluntary winding-up after transferring all the assets of the Company to the proprietorship firm.

Warm Regards,

Veeral Gandhi