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Conversion to private ltd

Mayank Maheshwari (Article assistant) (99 Points)

29 May 2015

we are a sole properitorship business concern, doing business in government work contacts, converting into new company due to tender requirements. my questions are : 1. whether i will be required to pay stamp duty again on all the CC OD limits of 3 crores which was previously on the name of properitorship firm? is there any way to avoid the same? 2. whether my past track record related to turnover conditions of tender will be considered for my company.?

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P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 30 May 2015

There is no provision in Companies Act for conversion of a proprietorship concern into a company. Hence you will have to take following action:

1. Incorporate a new company.

2. Enter into an agreement between the proprietor and the company to transfer business of the firm to the company

3. Get bank limits sanctioned in the name of the company

4. Execute documents with Bank and pay stamp duty again

You can bring facts to the notice of the Govt Department. It is for them to decide whether they would like to consider your past experience as proprietor or not.