1. incorporation of a new company for doing a new business, or
2. conversion of existing business of a sole proprietory concern or partnership firm into a company.

A sole proprietory or partnership business can be converted into a company in any of the following ways:

1. By outright sale of the business as a going concern. It may be a block sale where the following takes over all the assets and liabilities of the firm or it may be partial take over of certain assets and liabilities. The consideration may be based on itemized sale or it may be on slump sale basis.
2. A company becoming a partner of the firm which will be dissolved thereafter by making partners of the firms the only shareholders of the newly incorporated company for which the following steps should be taken:
   

   1. Form a private company as per the procedure.
   2. The proprietor of the existing business alongwith some other persons (generally, family members and friends) or the partners of the existing firms, are the subscribers to the Company Memorandum of Association.
   3. Make the newly formed company a partner with the sole-proprietor or the partners of the existing business. For this purpose a fresh partnership deed is to be executed.
   4. Make a provision in the new partnership deed for the transfer of all assets and liabilities of the firm to any one of the partners who will pay off to the other partners.
   5. Dissolve the partnership with the whole business going to the company as the sole continuing partner.
   6. Every other partner of the firm (or the proprietor) gets shares in the company in lieu of his interest in the firm on dissolution.