Hiring a Business Development Manager for a Sole Proprietorship: Do We Need to Become a Pvt. Ltd.?

Hello, we have a sole proprietorship and we want to hire a Business Development Manager to expand. Is it mandatory to convert it into a Pvt. Ltd.? I want to know what all the requirements are to hire one.

There's no imperative need to convert a proprietorship firm to a Pvt. Ltd. Co. to develop your business. Even in a proprietorship firm, you can recruit persons to any post. Nevertheless, converting into a Pvt. Ltd. Co. is the option and discretion of the proprietor, at his or her own will. You can also consider registering it as a partnership firm with a Limited Liability Partnership (LLP) status, taking a few from your own family or friends as your partner(s). Incorporating the firm as a Pvt. Ltd. Co. involves comparatively more procedures, filing of returns, maintenance of records/accounts, and audit. It also requires the role of a Company Secretary, either as a consultant or a full-time incumbent, to manage statutory requirements, shareholding, etc. My suggestion is, for the present, you are well advised to convert it to a partnership firm with LLP status. In due course, considering requirements, you may think of converting it to a Ltd. Co.

A candidate who is either ACA/ACS, MBA(F), or BE/MBA-Fin. with LL.B., possessing in-depth knowledge and experience in corporate affairs and business development, will be an ideal choice.

Continuing the above post, there is one option available to you if you wish to have the distinction of owning "A Company" without admitting anyone as a partner or a shareholder, yet still remaining and ruling it as a King. Read on to learn how to go about it.

One More Option: OPC-ONE PERSON COMPANY

With the introduction of the overhauled Companies Act (1956) 2013, a new provision has been introduced that a Sole Proprietorship firm, where there's only one owner, can become a company known as OPC-ONE PERSON COMPANY. You can read about the salient features, formation, etc., provided in the attachment. The choice is yours.