Convert Proprietorship to Private Limited Company
Move a sole proprietorship into a company — tax-neutral under Section 47(xiv)
- 1IncorporateCompany formed with the proprietor as majority shareholder.
- 2TransferBusiness transferred for shares under a BTA.
- 3MigrateGST, bank, licences and contracts moved to the company.
Share your details. We’ll reply on WhatsApp with the next steps and a checklist.
Pick a plan — the fee is adjusted if you hire us within 30 days.
About Convert Proprietorship to Private Limited Company
A clear overview, in simple terms — what it is, why it matters, and how we handle it.
A proprietorship can't be converted by a single MCA form, because it has no separate legal existence. Instead, you incorporate a private limited company (or OPC) and transfer the whole business to it under a business transfer agreement in exchange for shares. Under Section 47(xiv) the transfer is not taxed if all assets and liabilities move to the company, the proprietor gets only shares as consideration, and keeps at least 50% of the voting power for five years.
The tax exemption is conditional for five years. If the proprietor's voting power drops below 50% or any consideration other than shares is paid, the exempted gain becomes taxable in the company's hands under Section 47A(3). We structure fundraising plans around this before the conversion, not after.
On the GST side, a transfer of a business as a going concern is exempt, and the unutilised input tax credit can move to the company by filing Form GST ITC-02. Bank accounts, licences, contracts and customer invoices then shift to the company's name, and the proprietor's GST registration is cancelled.
| Route | Incorporate company + business transfer agreement |
|---|---|
| Tax exemption | Section 47(xiv), subject to conditions for 5 years |
| Voting condition | Proprietor holds ≥ 50% voting power for 5 years |
| GST | Going-concern transfer exempt; ITC moved via GST ITC-02 |
| Consequence of breach | Gain taxed in the company's hands (Section 47A(3)) |
Who this is for
Common scenarios where this service is a good fit.
- Proprietors raising equity or bringing in co-founders
- Growing businesses wanting limited liability
- Proprietors whose clients or lenders prefer a company
What you get
Clear deliverables so you know exactly what's included.
- Company incorporation (private limited or OPC)
- Business transfer agreement and valuation of net assets
- Share allotment and ROC filings
- GST ITC-02, new registrations and cancellation of old GSTIN
Expert review before every submission — not just data entry.
Working notes and reconciliations you can rely on in future notices.
Resident Indians, NRIs, expats and cross-border businesses — all served.
Documents required
A practical checklist. We'll tell you if anything else is needed based on your case.
* This is a base checklist. After a quick pre-check, we may ask for additional items specific to your case.
Process
A simple, trackable workflow — designed to avoid back-and-forth.
Company formed with the proprietor as majority shareholder.
Business transferred for shares under a BTA.
GST, bank, licences and contracts moved to the company.
Get a quote
We share a clear quote on WhatsApp after a quick checklist pre-check.
- Fixed quote on WhatsApp after a short look at your facts and documents.
- Government fees, if any, are paid at actuals and shown separately.
| Factor | DIY | Indus Tax |
|---|---|---|
| Expert review | ❌ | ✅ |
| Notice risk reduction | ❌ | ✅ |
| Deduction optimisation | ❌ | ✅ |
| Audit-ready records | ❌ | ✅ |
| AIS/26AS reconciliation | ❌ | ✅ |
Share your facts and deadline. We'll reply with the right checklist and a clear quote.
Fee adjusted against our service fee if you go ahead within 30 days.
- Priority CA Call-backSkip the queue — a CA calls you within 30 minutes.₹255
- RecommendedCA Consultation (30 min)Talk one matter through properly with a CA.₹755
- In-depth CA Review (60 min)Documents reviewed before the call, written action plan after.₹1,155
Call-backs run Mon–Sat, 9 AM–6 PM IST. Booked outside these hours? We call you first thing the next working morning.
Compare the 3 plansFrequently asked questions
Answers to the most common questions we get.
This page also covers
- Proprietorship to OPC
- Same route, with a one person company as the transferee.
- Business transfer agreement
- Slump transfer of the running business for shares.
Official sources
Indus Tax is a private professional services firm and is not affiliated with any government authority. Rules and fees change — we confirm current positions before filing.
