To Start a Proprietorship Business No registration is required as such, The registrations like Shops & Establishment, Vat (Sales Tax) or Service Tax Registration are required as these are necessitated due to the activity which the proprietorship intends to do and is common to all forms of business, In Other words these registrations are needed by any form of business so it is also needed for proprietorship. However to open a bank account in the name of business two entity proof is insisted by the Banker, Our Specialists shall be assisting you with these requirements based on the geographical location of the business. A proprietor secures the capital, establishes and operates the business, assumes all the risks, hence accepts all the profits and losses, and pays all the taxes. There is no separate pan card needed in the name of the business, the pan card of proprietor is also considered as the pan card of the firm. The return of Income Tax and payment of taxes is also done by the proprietor only.
A sole proprietorship is a the simplest form of business, which you will find all over world. Its like you woke up today and want to sell grocery, and you purchase goods from a wholesaler and start selling them instantly. You have created a proprietorship, No registration is needed. In case you need to open a bank account approach your nearest bank account and open a current account with them.
As there is no difference between the business and its owner in case of proprietorship, Unlike corporations, sole proprietorships are not treated separately for the income tax purposes. This means that any profit derived from your sole proprietorship is treated as your personal income and is accounted for on your individual tax return. Any such income is taxed to you in the year it was received or accrued to you. The business income shall be shown as separate income in the income tax return of the proprietor.
As Sole Proprietorship can be started at will and it only involves the owner. There is no documentation to be done do start a proprietorship business, However certain decision need to be taken like, What shall be the name of the proprietorship, The address where the proprietorship is being established, What activity it shall undertake etc, Based on the answer to above questions the further registration and licenses shall be suggested by setindiabiz startup specialists.
Opening current account in the name of the owner of the proprietorship firm is very easy, all they need is Know your customer (KYC) Documents of the proprietor. However if the bank account is to be opened in the name of the proprietorship then bank need two entity proof in the name of the firm. Setindiabiz Specialist shall be able to assist you for opening the account.
Yes. Unlike other incorporated business forms, you are personally liable for any of your sole proprietorship's debts or legal judgments against your business. This means that in order to satisfy debts owed by your business, debt collectors can come after your personal assets, homes, cars, etc. For this reason alone, you should be extremely cautious about setting up a sole proprietorship. Setindiabiz.com recommends One Person Company in place of proprietorship.
Strongly Recommended to have an consultation with our startup specialists, which is free and is available without any obligation as such to take our services. As every business is unique and there may be circumstances where a partnership, Limited Liability Partnership (LLP), Private Limited Company or some other kind of business structure is a better fit. You also may want to get more insight into the specific liabilities your sole proprietorship may face.