whatsapp

Proprietorship Registration

Start Your Business Easily

Starting a Proprietorship Firm is easy, simple, and cost-effective. Our packages offer free consultation, GST Registration, and Udyam Enrolment (MSME) to set up a proprietorship firm. The proprietorship is the simplest form of business. Talk to our start-up advisors to get started.

See Pricing

Setindiabiz is Trusted By Leading Brands

user
user
user
user
user
user
user
user
user
user
user
user
user
user
user
user
user
user

Start Proprietorship Firm

As two registrations in the name of the proprietorship firm are required as proof of entity and the address, we have made a combo package to start the proprietorship firm.

Important Points :
  • check-box-blue.svg
    Free Consultation
  • check-box-blue.svg
    MSME Udyam Registration
  • check-box-blue.svg
    100% Online Process
  • check-box-blue.svg
    GST Registration
  • check-box-blue.svg
    Easy to Start Business
  • check-box-blue.svg
    Free Invoicing Software
Pricing Starts

₹4000/-*

+ GST
help@setindiabiz.com
+919899600605
Support you can count on

Overview of Starting a Sole Proprietorship Firm in India

TimelineStarts Instantly
CostIt varies from state to state, as well as the nature of the business.
For IndiansNatural persons who are Indian Citizens can start a Proprietorship.
For NRI/OCINRI & OCI can establish a proprietorship on a non-repatriation basis.
For ForeignerForeigners need help to start a proprietorship in India.
Stepwise Process

Here are the steps to start a Sole Proprietorship:

Establish a Proprietorship Firm in India

A sole proprietorship is a single-owner business and is the simplest in which the sole owner infuses all its capital and, therefore, is entitled to all of its profits and losses. The proprietorship firm and the proprietor are one and the same thing. There is no distinction between ownership and management. There is a requirement for incorporation or registration of the sole proprietorship as such. However, certain common registrations such as GST, MSME, etc, are generally obtained for the firm.

Eligibility to Start Sole Proprietorship

While sole proprietorship is the simplest form of business and is less regulated, it is only available for Indian Citizens and Natural Persons of eighteen years of age. Foreigners can not establish sole proprietorships. However, there is an exception in the case of NRI and OCI, they are allowed to establish proprietorship.

  • Single Person Ownership
  • Only a natural person can be a proprietor
  • Only Indian citizens are eligible
  • Must have a Registered Address
  • Unique Name
  • Adequate Capital (No Min or Max Limit)
  • NRI/PIO can start a proprietorship on a Non-Repatriation basis.

Documents Required to Start Sole Proprietorship

As mentioned earlier, there is no need for registration or incorporation for a proprietorship firm. However, to conduct the proprietorship business, certain basic registrations, such as GST, MSME, or IEC, may be obtained. The following list of required documents is crucial for these registrations.

Directors / Shareholder Documents
  • 1
    PAN Card
  • 2
    Aadhar Card
  • 3
    Colour Photo
  • 4
    Address Proof
  • 5
    Office Address
  • 6
    NOC from the Owner of the Office Space

Stepwise Process for Starting a Sole Proprietorship

The Proprietorship Registration process in India is the easiest and simplest among all business structures. There is no requirement for a formal incorporation. You can start your business immediately after you have fulfilled all the minimum requirements mentioned above. However, you must take specific mandatory registrations to establish your firm’s legal existence after beginning business operations. Navigate the steps below to complete the Sole Proprietorship Registration process in India.

1

Step 1: Documentation for starting proprietorship

To start a proprietorship business, you should arrange the primary KYC documents for the proprietor, the business's sole owner. Proof of the proprietor's Aadhar, Pan, and residential address would be needed in the process. Every business in India must declare one address as its Principal Place of Business, for which proof of the premises, such as a utility bill and NOC from the owner of such premises, must be obtained.

2

Step 2: Select a Unique Name for the Business

The next step is to select a unique name for your Sole Proprietorship Firm. The name must be legally valid and available for use. Also, the chosen name must not infringe the trademark of some other business. As a best practice, you should register the business name as your adopted trademark. We can help you register the business name, domain name, brands, and logo as a Trademark.

3

Take MSME / Udyam Registration

Sole Proprietorships are usually small-scale local businesses that qualify as MSMEs. You can obtain the MSME registration for your proprietorship business and avail numerous benefits. These include collateral-free loans, interest subvention on loans, timely buyer payments, and 50% rebates on IPR registration. Moreover, an MSME registration certificate is crucial for opening a business bank account. We provide MSME Registration to Proprietorship Firms throughout India.

4

Step 4: Proprietorship GST Registration

Eligible Sole Proprietorship Firms must register for GST to fulfil all GST-related compliances. The applicant firm can submit the application and all GST registration documents required for a sole Proprietorship firm on the GST portal. When the GST department approves the application, a GSTIN is allotted to the firm. This GSTIN can be used for all future GST-related activities.

5

Step 5: Get Shops & Establishment Act Registration

Except for manufacturing businesses, all businesses are mandatorily required to get the Shops & Establishment Registration. This includes Sole Proprietorship firms as well. The registration is obtained from the State’s Labour Department, for which either an online or offline application is filed. The application must be accompanied by all the documents listed above.

6

Step 6: Industry-specific Registrations

Certain licenses must be obtained mandatorily based on the nature of the business activity and the registered office location of the Proprietorship. For instance, an IEC Code is required if the Proprietorship business conducts import/export activities. An FSSAI Registration or License is also required if the business deals in food-related activities.

How to open a Bank Account for the Sole Proprietorship firm

To open a bank account for the sole proprietorship firm, you must contact any national bank. They would insist on two documents with the name of the sole proprietorship firm and address. Where one document is taken as proof of entity, the other is the address proof. These requirements are part of the KYC requirements prescribed by the RBI.

The government fees include the registration fee charged by the Registrar of Companies for Pvt Limited company registration, stamp duty levied by the concerned state government (which may differ from state to state), and the cost of making the DSC. By partnering with Setindiabiz, you can ensure a smooth process and minimise associated costs.

  • MSME Udyam Registration Certificate
  • GST Registration Certificate
  • Shops & Establishment Registration
  • ITR of last FY, wherein the business name is mentioned.

The RBI regulations regulate the banks and must adhere to the KYC-related requirements as prescribed from time to time. We can help you arrange the necessary registration, as discussed above.

Sole Proprietorship vs OPC

Both Sole Proprietorships and One-Person Companies are single-owner business structures. In the table below, we have comprehensively compared proprietorship firm registration with one-person company registration. This will help you make an informed decision while choosing between the two single-owner business entities.

Sole ProprietorshipOne Person Company

Merits (Pros)

  • Easy to Set Up
  • Low Cost of Operations
  • Lesser Compliances
  • Quick & Easy to Dissolve
  • Full Control over Management
  • Effective Privacy
  • Quick Decisions-Making Process
  • No Profit Sharing
  • Extremely Suitable for Small Businesses

Demerits (Cons)

  • Unrestricted Liability
  • Limited Investment Potential
  • Limited Period of Existence
  • No scope of Ownership Transfer

Merits (Pros)

  • Limited Liability
  • Separate Management Structure
  • No Profit Sharing
  • Perpetual Succession
  • Ownership Easily Transferred to Nominee

Demerits (Cons)

  • Limited Investment Potential
  • High Number of Compliances
  • FDI Not Permitted
  • Restricted Business Operations
  • High Cost of Operations
  • Complex Decision-Making Process
  • Lack of Privacy
  • Long and Costly Incorporation Process

Frequently Asked Questions

A sole proprietorship firm is the simplest form of business owned and controlled by a single individual. The owner of the proprietorship firm is known as the proprietor. The proprietor alone invests the entire capital and is thus entitled to all the sole proprietorship’s income. The liability of a sole proprietor is personal and unlimited. This indicates that the proprietor is liable to pay off all liabilities from his pocket if such a need arises.

Any person who is over 18 years, capable of entering into a lawful contract is eligible to start a proprietorship. The option to create a proprietorship is available to Indian Citizens only. However, NRIs and OCIs are permitted to establish proprietorship firms and invest only on a non-repatriation basis.

A proprietorship business can be started with any amount of capital, as there is no prescribed limit for it. The proprietor must infuse the capital into the proprietorship based on the nature and scale of its business activities. He can introduce or withdraw capital at any time from the accounts of the proprietorship business as drawings.

The Reserve Bank of India regulates the opening of bank accounts of proprietorship businesses. It has prescribed the submission of at least two proofs of identity of the proprietorship in order to open its bank account. To open a bank account for the business, you can approach any bank near you. Submit the prescribed application form along with the necessary supporting documents. Please click here to read our article on the list of required documents for the proprietorship firms’ opening bank accounts.

Yes, proprietorship businesses can be converted to LLPs or Private Limited Companies. However, the conversion process is complicated, and we do not recommend it unless it is necessary.

Proprietorships do not have a separate legal identity and, hence, are not treated separately for income tax purposes. This means that any profit derived from a sole proprietorship is treated as the income of the proprietor. It is accounted for on the tax returns filed by the proprietor. The business income shall be shown as separate income in the proprietor’s income tax return.

Yes. Unlike other incorporated business forms, the proprietor’s liability towards his sole proprietorship is unlimited. This means that debts and losses accumulated by the business shall be paid off using the proprietor’s personal assets.

Since a formal Sole Proprietorship registration is not required, the fee depends on the other tax and regulatory registrations. These include the MSME registration fee, the GST registration fee, and the Shops Act registration fee.