Converting Sole Proprietorship to Private Limited: Can I Keep My ESIC and EPF Numbers?

Dear all,

I own a sole proprietorship firm covered under ESIC and EPF Acts. Now, I want to convert it into a private limited firm. Is there any way to keep the very same ESIC and EPF registration numbers? I don't want to invest again in getting a new EPF or ESIC registration number.

Please note that your registrations with EPF/ESI, etc., will remain the same. After conversion into a private limited company, you have to submit an online amendment for ESI and a written request to the RPFC, EPF concerned with documentary evidence.

P.K. Sharma

Dear CiteHR Member,

The present sole proprietor must be one of the directors of the proposed Pvt. Ltd. company. You need to send request letters to the concerned department for a name change from proprietorship to Pvt. Ltd. company, providing all the necessary supporting documents. They will make the changes.

It is better to close the proprietary firm and open a new ESI and PF account with the Pvt. company PAN number. There are no charges for this process, and it can be done online free of cost. Anyone can do it themselves.

Closure of an Establishment under ESIC/EPF

Closure of an establishment under ESIC/EPF is not a smooth process; it follows its own procedure and timeline. The employer has two options:

1) Amend the existing registrations by submitting a change of constitution. This will require a complete set of documents as needed for new registrations; only the old codes will remain the same.

OR

2) Obtain new codes and transfer all employees to the new establishment code.

2a) Submit the bank account closure and trade license cancellation records to the departments for the cancellation of old numbers.

Dear Ilaathippu,

Please find the attached sheet for your ready reference to calculate penal damages for delayed payments under sections 7Q and 14B.

Thanks,
Murali

Mr. Reddy's suggestion is not advisable as surrendering registrations requires certain closure documents, which are not possible to obtain while the establishment is operational. The issue is not whether fresh registrations are free or incur costs, but rather conveying logical and legal opinions to individuals seeking clarification.

It would be more appropriate for the individual to consider amending these registrations after converting the establishment into a Private Limited company, a process that is both easy and "free."

Regards, P.K. Sharma

Dear Sir/Madam,

There are two PAN numbers - one is for the Pvt Ltd and the other is for the proprietor. The proprietary PAN is already in use; how can this be resolved? Please address the specific issues. It is advisable to consult the relevant authorities in the PF department for a better decision. Our platform is meant for discussions to find solutions. My opinion is not final, and neither is yours. Please refrain from criticizing anyone for their suggestions.

My intentions are not to criticize anyone, but when the processes, procedures, and remedies are available in the law, why should we advise any shortcuts or act contrary to the provisions, such as declaring closure of the earlier establishment and obtaining new registrations?

You are correct that the PAN number will vary for proprietorships, partnership firms, and companies. However, the EPF site does not allow us to make direct alterations as is possible with ESIC. Requests for changes in name, address, or ownership are typically forwarded to the relevant Enforcement Officer, and amendments are only made following their report. The authority to make alterations is not even held by the RPFC; they serve as a recommending authority.

Regards, PK SHARMA

Once the request is submitted for a change of constitution, after verification of documents, EPFO allows the applicant to revise Form 5A, update the new PAN details, and submit. Within two to three days, they approve the changes, then the applicant can print the revised form and submit it.

Under ESIC, modifying establishment details is straightforward. Everything, including the PAN, is changeable. However, the applicant must take a printout and submit it with the necessary documents to the Regional office to execute the changes.