The Sole Proprietorship requires obtaining a PAN card for a proprietor, opening a bank account in the name of the business, a Certificate of Registration under the Shop and Establishment Act of the respective state and GST Registration. The registration process takes approximately 10 days, subject to departmental approval and reverts from the respective department.
What is Proprietorship Firm..?
A sole proprietorship is a very popular type of business entity that is owned and managed by a single entrepreneur particularly in the unorganized sector, mainly small traders and merchants. Proprietorships are recognized by registrations such as service tax registration or sales tax registration. It is very easy to start a proprietorship firm as it has very minimal regulatory compliance formalities for commencing and operating a business.
However, proprietorship firms do not offer benefits such as limited liability proprietorship, separate legal entity, corporate legal status, easy transferability, perpetual succession. Therefore, proprietorship firm registration is best suited only for micro and small businesses that may not have a continuous existence.
Registered Proprietorship Firm through Taxcure india
Advantages of Sole Proprietorship
- You’re the Boss
- You keep all the profit
- Start-up Costs are low
- Quick Decision
Disadvantages of Sole Proprietorship
- Unlimited liability
- Your capacity to raise capital is limited.
- All the responsibility for making day-to-day business decisions is yours.
- Retaining high-calibre employees can be difficult.
Applying for proprietorship
Its Proprietorship Firm Structure
| Details | Partnership firm is formed by an agreement between two or more people to own and run the business. |
| Minimum no of Member | 1 |
| Compliance | Low |
| Obtaining Fund | Challenging |
| Tax Rate | Slab |
Required License for Proprietorship Firm
Steps to register Proprietorship Firm
Step 2: Name Selection
Step 3: Applying Startup License
- MSME – Udyam Aadhar
- Gumasta – Shop Act Establishment
- Food License (if your Food Business)
- GST (if you required)
- Trademark (for logo)
- IEC – Import Export Code (Import Export Business)
Step 4: Open a Bank Account (Current Account)
List of Required Documents for Proprietorship Firm
- PAN Card
- Aadhar Card
- Mobile no.
- Email Id
- Photo
- Nature of Business
- Light Bill (for address)
- RENT AGREEMENT (if office is rented)
- Owner Signature
- Trade Name (XYZ Enterprises)
- CANCELED CHEQUE
Required Compliances
- File Income Tax Return Annually
- GST Returns Monthly or Quarterly
FAQ
Who is a proprietor of a company?
The sole proprietor has unconditional and full control over its business. Example: Beauty parlor, Salo, general store and sweet shop run by a single owner.
How do I start a proprietorship firm?
Step 1: Gather Documentation.
Step 2: Select a Unique Name.
Step 3: Udyam Registration, Udyog Aadhar, and MSME.
Step 4: GST Registration.
Step 5: Obtain Other Tax Registrations.
Step 6: Shop and Establishment Registration.
Step 7: Open a Bank Account.
What are the types of proprietorship firms?
The proprietorship business has several benefits, including easy set-up, low costs, and complete control over business operations. There are primarily three types of proprietorship firm Sole Proprietorship, Partnership, Proprietorship, One Person Company (OPC)
Can a proprietor be CEO?
The owner or sole proprietor owns their business as well as their financial resources for the business. Ownership in legal terms is someone who has almost all or all of the company’s shares in their name. A CEO, on the other hand, is a title that has nothing to do with ownership and more to do with function.
Who runs a proprietorship?
Sole proprietorships are the most common and simple form of business organization. They are formed by persons who own all or most of the business property and assets. They are 100% responsible for all of the control, liabilities and management of a business.
Is proprietorship a startup?
To be eligible for registration as a startup in India, the following criteria must be met: Entity Type: The startup should be registered as a private limited company, partnership firm, limited liability partnership (LLP), or sole proprietorship.
GST mandatory for proprietorship?
The proprietor needs to obtain the Registration Certificate under the Shops and Establishment Act of the state in which the business is located. The sole proprietorship should also register for GST if the business turnover exceeds Rs. 20 lakh
What is proof of proprietorship?
For opening a current account of the sole proprietorship, you must submit proof of sole proprietorship business and registered office address proof. A GST registration, MSME registration or a Shops and Establishment Act License acts as proof of the existence of the sole proprietorship firm.
Is sole proprietorship easy?
A sole proprietorship is easy to establish. You don’t need to take any legal steps to form this type of business. If you are the only owner and begin conducting business, you automatically become a sole proprietorship.
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