Sole proprietorship and we want to hire a Business development manager to expand. Is it mandatory to convert it into 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 PVT LTD? I want to know what all the requirements to hire one.

Hi Barkha,
There's no imperative need to convert a Proprietorship firm to a Pvt. Ltd Co. with a view to develop your business. Even in a Prop. firm you can recruit persons to any post. Nevertheless, converting into a Pvt.Ltd Co. is the option & discretion of the Prop., at his/her own will. You also can consider registering it as Partnership firm with a Ltd Liability partnership (LLP) firm taking a few from your own family or friends as your partner(s). Incorporating the firm as a Pvt.Ltd Co involve comparatively more procedures, filing of returns, maintenance of records/accounts & audit. Also require a role of a Co.Secretary either as a consultant or a full time incumbent to manage statutory requirement, share holding etc. My suggestion is, for the present, you are well advised if convert it to a Partnership firm with LLP status. In due course, considering requirement you may think of converting it to a Ltd.Co.
A candidate either, ACA/ACS, MBA(F) or BE/MBA-Fin.with LL.B., possessing in depth knowledge & experience in corporate affairs & business devt. 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 any one as a partner or a shareholder. Still, you remain and rule it as a King. Read on how to go about it.
This is all about one more option. With the introduction of the overhauled Companies Act (1956) 2013, a new provision has been introduced that a Sole Propritorship firm, where it's only one owner, can become a Co. that's known as OPC-ONE PERSON COMPANY. You'll read the salient features, formation etc. provided in the attachment. Choice is yours.