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Proprietorship Formation

Start your Business in 1 Day in India

  1. Free Consultation in Our Offices
  2. TAN Number Allotment
  3. Registration under MSME
  4. GST Registration

Start your business as proprietorship easily within one day. There is no specific registration requirement for proprietorship business. However, to start the same some other registrations are required as it is included in our basic package.

Register Your Proprietorship @ Rs. 2,499/- Proprietorship Registration
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Proprietorship Registration

Proprietorship Registration

A proprietorship is the simplest form of business in which enterprises can start, Only one person invests entire capital in the firm, and he alone is entitled to the profits of the business. For a Proprietorship Firm, there is no registration as such, and it starts at the will of the proprietor/owner without obtaining any certification. However, registration with Goods and Services Tax (GST for Proprietorship Firm) and obtaining TAN number for complying with the TDS related provisions of the Income Tax Act is desirable and necessary. Bankers also insist for two KYC documents in the name of the firm to open a Current Bank Account in the name of Proprietorship Firm. We are available to assist in the starting proprietorship firms all over India.

Proprietorship Registration.jpg

Important Features of Sole Proprietorship Firm

Start Immediately

Start Immediately

A Proprietorship can commence its business immediately at the will of the proprietor, there is no specific registration is mandatory, however GST and MSME is desirable

Tax Benefit

Tax Benefit

The income of the proprietorship Firm is included in the income of its proprietor itself. Hence slab based income tax rates apply, which results in a substantial tax benefit.

No Foreign Funding

No Foreign Funding

The foreign Investment (FDI) is not permissible in a proprietorship, However an NRI can invest in proprietorship firm provided the profits are not repatriated out of India.

Easy to Close

Easy to Close

In case the proprietorship is no longer required, it can be closed easily, just surrender all registrations and licenses obtained by the proprietorship business.

Proprietorship Registration

Everything From Start to Finish within 1 Day

Order Now @ Rs. 2,499/-All Inclusive | No Hidden Charges | Only for India Citizens
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  • All India Service
  • 100% Online Process
  • Track work progress through Tickets
  • 14+ Years of experience
  • Easy to start Proprietorship
  • Fast and Online Service
  • TAN Number Allotment
  • MSME Registration
  • GST Registration
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List of Documents for Proprietorship Registration

  1. Two Colour Photograph
  2. Self Attested Copy of Pan Card
  3. Valid Identity Proof of Proprietor
  4. Latest Address Proof of Proprietor
  5. Canceled Cheque
  6. Proof of Registered Address
  7. NOC from the Owner of Premises

Proprietorship Registration Process

1.
NAME SELECTION

First thing is to select a unique name of your proprietorship business, however, ensure that the name does not infringe with others trademark.

2.
TAN NUMBER

You are required to deduct TDS while making payments, hence the next step is to obtain TAN number, which is mandatory to submit TDS Returns.

3.
MSME REGISTRATION

Udyog Aadhar enables an entrepreneur to seek online services offered by Government Departments apart from various other benefits under MSME.

4.
GST REGISTRATION

You may not be able to supply goods or services all over India unless GST Registration is obtained, However for same state supply the limit is 20 Lac.

Video On Proprietorship

Common Registration or Licenses for Sole Proprietorship

Shops & Establishment Registration

Shops & Establishment Registration

Every shop and the commercial establishment is required to obtain establishment registration with the Labour Department within 30 days of starting their business. It is mandatory for all states in India.

Trade License

Trade License

To ensures that the citizens are not adversely affected by health hazard and nuisance by the improper carrying of trade a License is necessary from the municipality within 30 days of starting the business.

Professional Tax Registration

Majority of the state governments have passed specific legislation to impose a tax on profession, employment of calling of any nature, however, it can not be more than Rs. 2500 per annum.

GST Registration

Goods and Services Tax (GST)

GST Registration is mandatory for every business engaged in providing services or supply of goods, where the turnover exceeds Rs. 20 Lac or does even a single transaction in an interstate trade.

Food License

Food License / FSSAI Registration

If you are engaged in a business of manufacturing, trading, storing or dealing in any manner of food items, then the state level FSSAI registration or Central License is mandatory based on the turnover.

Drug License

Wholesale or Retail Drug License is location-based and is granted by the State Government based on fulfilling certain norms and criteria. No entity can start or continue sale/trade of Drugs without drug license.

Private Security Agency License

Private Security Agency is a lucrative business with immense potential, however, it can be started or continued only after obtaining a license from the competent authority as designated by the state government.

Import Export Code

Import Export Code (IEC)

Import Export Code (IEC) is a ten-digit pan based registration with the DGFT. IEC is a mandatory prerequisite to starting a business of Import or Export in India. Only one IEC code is issued against a pan.

FAQ's

1. What is the difference between Proprietorship and Other Forms of Business?

We h ave prepared a detailed and easy to understand comparative table showing availability of features and advantages of one form of business to that of others. The same can be found at the end of this page. Click here to learn more.

2. What is the minimum amount of capital required to start a Proprietorship Firm?

A proprietorship business can be started with any amount of capital and as such, there is no provision in the law which prescribe any minimum capital for the firm. The capital must be infused by the proprietor based on the nature and scale of the proposed business. You shall have the ability to introduce or withdraw capital at any time from the accounts of the proprietorship business as drawings.

3. Do I require another person to register a Sole Proprietorship in India?

NO. A proprietorship business is owned and controlled by a sole person. There is no requirement to engage any other person to start a proprietorship business.

4. Does the proprietor have to be an Indian to start a Proprietorship firm?

Yes. Only an Indian Citizen can start proprietorship business. Similarly, no foreign funding is allowed in a proprietorship form of business. However, an NRI or a Person of Indian Origin (POI) can invest in proprietorship with prior approval from the central government of India.

5. Under which Government Authority, the application of Sole Proprietorship Firm Registration is submitted?

There is no law which enforces registration of a proprietorship firm as such, SETINDIABIZ helps entrepreneurs in securing registration under MSME, GST, Shops & Establishment, etc. the MSME registration is done under Micro, Small and Medium Establishments Development Act, 2006 of Central Government.

6. What are the documents required for registration of Proprietorship Firm under MSME in India?

Following are the proprietor documents which are required for registration of firm under MSME.
  • Copy of Aadhar Card
  • PAN card of the Sole Proprietor
  • Details of Business Place

7. Will my Proprietorship firm have a Certificate of Incorporation or Registration?

There is no certificate of registration or incorporation for proprietorship business as such. The legal identity of proprietorship as an entity is determined through various other registration or licenses obtained in the name of the proprietorship firm on the case to case basis. Similarly, each specific registration shall result in the issuance of a certificate of registration, for example, GST Certificate, MSME Registration Certificate, Tan Allotment Letter, etc.

8. How to open a bank account for a Proprietorship?

The opening of Bank Account is regulated by the Reserve Bank of India, which have prescribed submission at least two entity proof for the proprietorship. To open a bank account, you may approach any bank nearest to you, and generally, they need following documents.

1. List of Entity Proof of Sole Proprietorship: (Any two documents from the below list)
  1. Certificate of Registration with MSME
  2. GST Registration Certificate
  3. Registration with Shops & Establishment
  4. Registration or License-related to Central-State govt.
  5. Certificate related to Municipal authorities
  6. Tax returns Showing Name of Proprietorship Firm
  7. Import Export Certificate in Firm Name
  8. CA certificate for Existence of Entity
  9. Registered lease/ license in Proprietorship Name
  10. Utility Bills/ TDS certificate in the name of the firm
2. Identity Proof of Proprietor for Bank A/c Opening:
  1. PAN Card
  2. Driving Licence
  3. Passport
  4. ID cards issued central and state govt.
  5. Passbook scheduled commercial bank
  6. Marriage certificate
  7. Voters ID card
  8. Aadhar Card
3. Address Proof of Proprietor
  1. Driving Licence
  2. Passport.
  3. ID cards issued central & state govt.
  4. Passbook scheduled commercial bank
  5. Utility Bill
  6. Marriage certificate
  7. Municipal corporation bill
  8. Credit Card Bill
  9. Registered Leave and Licence Agreement
  10. Bank statement

9. Can I later convert my Proprietorship into a Company or LLP?

Yes, the proprietorship can be converted to LLP or Private Limited Company

FAQ's

COMPARE FORMS OF BUSINESS

Check advantages and disadvantages of Common Business Entity Types

  • +
    Separate legal entity
    • A Company is a separate legal entity separate from its promoters
    • An OPC is a separate legal entity separate from its promoters
    • An LLP is a separate legal entity separate from its promoters
    • A Partnership is a legal entity but not different from partners
    • The proprietor and the proprietorship business is the same thing
  • +
    Limited Liability
    • Shareholders of a Company are bound to pay only up to the capital they have subscribed to the company.
    • In OPC, unlike a proprietorship, the shareholder cannot be asked to pay beyond his subscribed capital
    • The partners of an LLP can be called upon to pay only up to the amount of capital they subscribed to.
    • There is no protection of limited liability, even the personal properties of partners are at risk for losses of business
    • The proprietor is the whole sole of the business, and his liability to the debts or losses of proprietorship is unlimited.
  • +
    Number of members
    • A Company can be opened with at least two people. However, the maximum number cannot be more than 200
    • In the case of OPC, Only one person can be a shareholder. He would be required to appoint a nominee.
    • With two partners an LLP can be incorporated, there is no limit on the maximum number of partners
    • A Partnership firm can start with a minimum of two partners, the, however, the maximum number is capped at 20
    • Only one person is required for proprietorship, also known as proprietor.
  • 2 - 200
  • 1
  • 2 - unlimited
  • 2 - 20
  • 1
  • +
    Number of Directors /DP
    • A company can be opened with at least two and a maximum of 15 directors. The same person can be a shareholder as well as director
    • At least one person must be appointed as director of the company. The shareholder and director may be the same person
    • The minimum two designated partner is required in an LLP & there is no limit to the maximum number.
    • There is no separation of ownership and management in case of a partnership. All partners are equally responsible for the conduct of business.
    • In case of a proprietorship, the proprietor is solely responsible for the conduct of business.
  • 2-15
  • 1-15
  • 2 to unlimited
  • Not Applicable
  • Not Applicable
  • +
    Foreign Investment (FDI)
    • Foreign Direct Investment in case of a Private Limited Company is available under the automatic route.
    • FDI is not allowed in One Person Company
    • FDI in LLP Is permitted subject to prior approval from the central government
    • FDI is not allowed in Partnership Firm
    • FDI is not allowed in proprietorship Business.
  • +
    Ownership Transfer-ability
    • The shareholding of a Pvt Ltd Company is easily transferable
    • OPC Shares can be transferred to new shareholder along with the nominee
    • In LLP share of a partner can be transferred with the consent of all other partners.
    • Not Possible, every admission or removal of partner amounts to the new firm.
    • Not Applicable
  • +
    Perpetual Existence
    • A Company exists beyond the life of its owners /shareholder. After the death, the shares transmits to legal heirs
    • OPC Continues to exist even after the death of its only shareholder, as it passes to the nominee.
    • The LLP also have perpetual existence and exists beyond the life of the designated partner
    • No perpetual existence, with the death of a partner, the partnership ends.
    • No perpetual existence, with the death of the proprietor, it ends.
  • +
    Tax Benefits
    • The company tax rate is flat at 25% on its profits
    • The company tax rate is 25% on its profits
    • LLP Income Tax Rate is 30% on its profits
    • Partnership firms are taxed at 30% on its profits
    • For a small business with low turnover, there is the benefit of individual tax slabs
  • Effective
  • Effective
  • Low
  • Low
  • Good
  • +
    Statutory Compliance
    • The company is required to file an annual return, balance sheet to ROC and ITR around the month of September
    • OPC is required to file an annual return, balance sheet to ROC and ITR around the month of September
    • LLP have to file an annual return in form 11 and financial statement in Form 8 and ITR
    • Only ITR is to be filed
    • ITR is required to be filed if the taxable income is more than 2.5 Lac
  • High
  • High
  • Low
  • Minimum
  • Minimum
  • Formation Cost
  • 6,899/-
  • 2,999/-
  • 2,999/-
  • 5,999/-
  • 2,499/-

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