Legal Question in Civil Rights Law in India

Hello,

i run a sole proprietorship which is into trading of pharmaceuticals. I buy on credit and also sell on credit. my fear is that if at some stage of business, i am unable to pay my creditors, my personal property can be attached as per Indian law. If i convert into pvt limited company and some liability arises to creditors for past transactions when the entity was sole prop, how will law treat it ?


Asked on 11/24/09, 1:09 pm

1 Answer from Attorneys
RAJIV GUPTA (Cell: +91 9811284735) [email protected]

yes, as per law, the personal properties of a proprietor can also attached by the creditors. better convert your business into a private limited company and then your liabilities are also limited. you need to clear your debts as a proprietor or start doing business in the newly formed company only.

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Answered on 11/25/09, 12:53 am


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