Start your business as proprietorship quickly within one day. There is no specific registration requirement for a proprietorship business. However, to start the same, some other registrations are required as it is included in our basic package. The Sole 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 business's profits.
The Stepwise Process of Proprietorship Firm
1. Decide Name of the Firm
2. Trademark Search & Registration
3. Apply Pan Card of the Proprietor
4. Obtain TAN Number for TDS Compliance
5. Apply for GST Registration
6. Remember to Register as MSME
Process & Timeline for Starting Proprietorship Firm in India
01
Documentation : Day - 1
The process starts with documentation of the proprietor and the place of business where the business of the firm shall be carried on, ensure that the documents are updated and correct. The list of documents required is provided above for your reference. We shall also require information in the Questionnaire For Proprietorship Registration.
02
Selection of Name : Day - 1
First thing is to select a unique name of your proprietorship business and the starting point should be to search the proposed name of the business in trademark register to avoid any infringement on someone else's trademark. To learn more on trademark
03
MSME - UDYOG Aadhar : Day - 1
To open a bank account there is need of two documents in the name of the proprietorship, one of the registrations could be Udyog Aadhar which enables an entrepreneur to seek online services offered by Government Departments apart from various other benefits under MSME Act. To learn more on MSME Registration
04
GST Registration - Day : 1-7
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. This also serves as a second document document issued for the proprietorship, which shall be required by banks while opening a bank account in the name of the firm.To learn more on GST Registration
05
TAN Number Allotment - Day : 1-7
TAN number is a permanent number allotted to business for complying with the provisions of withholding tax. 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.
Advantages of Proprietorship Registration
01.
Easy to Start
The entrepreneur can start operations and receive payments from clients as no registrations are required to start a proprietorship.
02.
Ease of compliance
he other advantage of a Proprietorship is that it requires no additional compliance in most cases. The PAN of the proprietor and proprietorship are one and the same. Hence in most cases, only income tax return in Form ITR-3 must be filed every year.
03.
Ease of dissolution
he proprietor does not have to particularly wind up the company incase he wants to cease operations. This saves a lot of time and effort.
Disadvantages of Proprietorship Registration
01.
Liability protection:
A sole proprietorship does not provide the proprietor with limited liability protection. So the proprietor would be held personally liable in case of any loss or liability.
02.
Transferability:
Any license or registration obtained in the name of the proprietorship cannot be transferred to any other person or entity.
03.
Fundraising:
A proprietorship cannot raise equity funds from angel investors, venture capital firms or PE funds. Banks also tend to restrictions on the amount of credit they can lend.
Due to the disadvantages mentioned above, this registration will be suitable only for small businesses and the unorganised sector with a limited period of existence.
What Is Included In Our Package?
MSME registration
TAN/TDS registration
Guidance on service tax, trademark, sales tax registration
FAQ's
Does the proprietor have to be an Indian to start a Proprietorship firm?
The Proprietor must be an Indian citizen and a Resident of India. There is no approval required prior to the commencement of business. But, Non-Resident Indians (NRI) and Persons of Indian Origin can invest or start sole their proprietorship business only with prior approval of the Government of India.
Under which Government Authority is the application of Sole Proprietorship Firm Registration is submitted?
Sole Proprietorship is an unorganized business structure and there is no specific law enforced for the said registration. LegalWiz.in provides services for Sole Proprietorship registration under MSME (Micro, Small and Medium Establishments) Development Act, 2006 of Central Government. The business entity must fulfill the registration requirement.
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.
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)
Certificate of Registration with MSME,
GST Registration Certificate,
Registration with Shops & Establishment,
Registration or License-related to Central-State govt.,
Certificate related to Municipal authorities,
Tax returns Showing Name of Proprietorship Firm,
Import Export Certificate in Firm Name,
CA certificate for Existence of Entity,
Registered lease/ license in Proprietorship Name,
Utility Bills/ TDS certificate in the name of the firm,
2. Identity Proof of Proprietor for Bank A/c Opening:
PAN Card,
Driving Licence,
Passport
ID cards issued central and state govt.,
Passbook scheduled commercial bank
Marriage certificate,
Voters ID card,
Aadhar Card
3. Address Proof of Proprietor
Driving Licence,
Passport,
ID cards issued central & state govt.,
Passbook scheduled commercial bank,
Utility Bill,
Marriage certificate,
Municipal corporation bill,
Credit Card Bill,
Registered Leave and Licence Agreement,
Bank statement
Can I later convert my Proprietorship into a Company or LLP?
Yes, the proprietorship can be converted to LLP or Private Limited Company
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
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.
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 The Micro, Small and Medium Enterprises Development Act, 2006 of Central Government.
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.
What is a sole proprietorship?
A sole proprietorship is the simplest form of business, which you will find all over world. It’s like you woke up today and wants, 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.