About Proprietorship Registration
A Proprietorship is a business that is operated, managed and controlled by a single person called as proprietor. It's safe and quick to start a small business in unorganized sectors. There is minimal regulatory compliances for proprietorship. However, for the entrepreneur, proprietorship does not offer a bundle of other benefits such as limited liability protection, separate legal entity, independent existence, shares transferability and most important is corporate structure.
What can we do for your proprietorship Business?
- Service Tax Registration
- VAT & CST Registration
- ESIC & PF Registration
- SSI Registration.
- Import-Export Code
- Shops & Establishments Act
Advantage of Proprietorship Business
Proprietorship business name is not required to registered in India for doing a business, the owner of a business can choose any name and start a business as long as it does not infringe on a registered trademark of any other company or brand. Since proprietor name is not registered, any other person or company can also use the same business name unless the owner obtains a trademark registration.
Proprietorship with less than Rs. 2.5 lakhs of net income from the business is not required to pay any income tax. Also, profit from proprietor business is assessed as personal income of the owner.
Less Regulatory Compliance
Sole Proprietorships thru tax registrations, so proprietorship business has to file tax returns only.
- PAN Card
- Latest Bank Statement/Telephone or Mobile Bill
- Voter's ID/Passport/Driver's License
- Passport-sized photograph
FAQs on Sole Proprietorship
1. Who can start a sole proprietorship?
Any Indian citizen with a 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 a Shops & Establishments Registration.
2. What documents are needed for opening a current account in the name of my sole proprietorship?
To open a current account, you need proof of the existence of your business. Most banks will ask for a Shops & Establishments Act Registration. In addition, you will need a PAN card and address and identity proofs.
3. How long does it take to establish a business with Sole Proprietorship?
A sole proprietorship business does not take more than 15 days to open-up and get running. This simplicity makes it popular among the small traders and merchants. It's also much cheaper, of course. This is the other reason why it's the most widely used business structure.
4. What businesses are commonly run as sole proprietorships?
Most local businesses are run as sole proprietorships, from your grocery store to a fast food vendor, and even 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.
5. What documents are required for starting a sole proprietorship?
To start a sole proprietorship, you would need address and identity proofs, PAN card, all KYC documents and rental agreement or sale deed (in case of Shops & Establishment Act Registration).
6. Aside from a current account, is there no need for any other registration?
This depends on the business you're in. If you're running a departmental store, then you would also need a VAT Registration once your turnover is over Rs. 5 lakh per annum. If you're running a air-conditioned restaurant, you would need a VAT Registration and Service Tax Registration.
7. Can I apply for any of these registrations online?
The registrations controlled by the central government -- service tax, for example - can be availed of online, whereas the state-government-controlled ones may or may not be. In some technologically advanced states, such as Karnata, they are, whereas in others they may not be.
8. What if I wish to convert from sole proprietorship to private limited company or partnership?
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.