WHAT IS A PROPRIETORSHIP FIRM


A sole Proprietorship is a business that is owned and managed by a single person. You could register your Proprietor Firm and run your business within just 5 days. It very popular Business Structure for running business particularly for the unorganized sector, small traders and merchants. There is no specific registration as Proprietor Firm; Proprietorship Registration is recognized by other registrations, such as a GST Registration, Shops and Establishment Registration, MSME Registration.

PROCEDURE FOR PROPRIETORSHIP FIRM REGISTRATION


For a Proprietorship firm, there is no separate registration required. Moreover, there is no procedure for obtaining name approval (as in the case of companies). You would have to just open a bank account with the firm name. But in case your business is liable for GST then you must obtain GST Registration. Further, for a sole proprietorship firm, no separate income tax PAN is required. The PAN of the proprietor will be the PAN of the firm and proprietor will have to file income tax return in his personal name.

 

 

DOCUMENTS REQUIRED FOR PROPRIETORSHIP FIRM REGISTRATION


hand_1    Photocopy of PAN Card (copy and photograph clearly visible)

 hand_1    Photocopy of Aadhar Card 

 hand_1    Bank statement not more than three months old with stamp and signature (bank letter confirming the name of the client, address and account number if not on the letterhead)

 hand_1    Photocopy of utility bills (Landline, Electricity, Gas Bill – Not more than three months old) as proof of Office with office address and in the name of the firm/proprietor

 hand_1    Photocopy of driving license (valid and not expired)

 hand_1    Cancelled cheque & Bank statement

 hand_1    Office proof with office address and in the name of the firm/proprietor

ADVANTAGES OF PROPRIETORSHIP FIRM


                            

                     Minimal Compliance

                                

                              Easy to Start  

                           

                    Relatively Inexpensive

Sole Proprietorships are only recognized via their Government and Tax Registrations, so the extent of their compliance is very limited to.

A sole proprietorship could take 5 days to start if all you need is a GST Registration The process is uncomplicated. PAN Card and Identity and Address Proofs are enough to get them done.

 

 Sole Proprietorship is inexpensive as compared to a One Person Company (OPC) and the minimal compliance requirements, as it is inexpensive even over the long-term. You would not need to hire an auditor. For example, this is why, despite its severe shortcoming (unlimited liability), small merchants and traders opt for it.

 

Proprietor Firm

Rs. 2,999 all-inclusive


Frequently Asked Questions (FAQ's)?

Any Indian citizen with current account in the name of their business can start a sole proprietorship. Registration may or may not be required, depending on what business you are planning to establish. However, to open a current account, banks typically require shops & Establishments Registration

To open a current account, you need proof of exsistence of your business. Most of the banks will be asking for Shops & Establishment Acts Registration. In addition, you will need a PAN Card, Address Proof and Id Proofs.

A Sole Proprietorship business does not take more than 15 days to openup and get running. This simplicity makes it popular among the small traders and merchants. It is also much cheaper ofcourse. This is the another reason for why it is the most widely used business structure.

Most local businesses commonly run as sole proprietorships, from your grocery store to a fast food vendor, and every small traders and manufacturers. This is not to say that larger businesses do not operate as sole proprietors. Even some jewellery shops are sole proprietors but, this is not recommended.

To start a sole proprietorship, you need Address and Identity Proofs, PAN Card, all KYC Documents and Rental Agreement or Sale Deed (In case of Shops & Establishment Act Registration)

This depends on the business you are in. If your turn over is more than 20 Lakhs then you need a GST Registration.

You can always choose to do so. The procedure is a little tedious, but it is possible. It is very common for sole proprietors to convert into Partnerships and Private Limited Companies at a later stage.