I want to convert my proprietorship business into a private limited company. What is the procedure under the Companies Act?

Detailed Legal Analysis

You can convert your proprietorship into a private limited company by incorporating a new private limited company under Section 3 of the Companies Act, 2013, as the Act does not provide a direct conversion mechanism for proprietorships. The typical route is to incorporate a new private limited company and then transfer the proprietorship's assets, liabilities, and contracts to the new company through a business transfer agreement.

You can also take advantage of Section 248 if you wish to use the same name, subject to ROC approval. Alternatively, you can use the scheme under Section 227 read with Section 394 for a structured transfer, though this is more commonly used for company-to-company amalgamations.

The new company must obtain fresh PAN, GST, and other registrations in its own name after incorporation.