Proprietorship Firm 2018-03-29T15:48:41+00:00

Small manufacturers and traders, who typically have just a service tax or VAT registration, are known as sole proprietors

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Definition
Pricing
Inclusive
Documents
Registration
Faq’s

Definition

What is proprietorship Firm?

A sole proprietorship is a business that is owned and managed by a single person. You could have one up and running within 15 days, which makes it very popular among the unorganised sector, particularly small traders and merchants. There is no such thing as registration; proprietorships are recognised by other registrations, such as a service tax registration or sales tax registration. As you would imagine with a business that’s so easy to set up, though, its shortcomings are severe: the liability of the proprietor is unlimited and it does not have a continuous existence. Sole proprietorship’s are one of the most common forms of business in India, used by most micro and small businesses operating in the unorganised sectors. Proprietorships are very easy to start and have very minimal regulatory compliance requirement for started and operating. However, after the startup phase, proprietorship’s do not offer the promoter a host of benefits such as limited liability proprietorship, corporate status, separate legal entity, independent existence, transferability, perpetual existence – which are desirable features for any business. Therefore, proprietorship registration is suited only for unorganised, small businesses that will remain small and/or have a limited period of existence.
There is no mechanism provided by the Government of India for the registration of a Proprietorship. Therefore, the existence of a proprietorship must be established through tax registrations and other business registrations that a business is required to have as per the rules and regulations. For instance, VAT or Service Tax or GST Registration can be obtained in the name of the Proprietor to establish that the Proprietor is operating a business as a sole proprietorship. Thus, all the registrations for a proprietorship would be in the name of the Proprietor, making the Proprietor personally liable for all the liabilities of the Proprietorship.

Advantages of a Sole Proprietorship Company Registration

  • Easy to form, no hassles

  • Ideal for small businesses like that of retail

  • Separate pan card is not required

  • Minimal Compliance

  • Minimum one person

  • Easy to Start

  • Can be closed on the will of the owner

  • Relatively Inexpensive

Pricing Details

Basic

12,000Yearly
  • Digital Signatures
  • Director Identification
  • Certficate
  • Name Reservation
  • Drafting of MOA

Standard

20,000Yearly
  • Digital Signatures
  • Director Identification
  • Certficate
  • Name Reservation
  • Drafting of MOA

Professional

30,000Yearly
  • Digital Signatures
  • Director Identification
  • Certficate
  • Name Reservation
  • Drafting of MOA

For M3 Customer 10% Discount

Inclusive in proprietorship registration package

Documents Required Proprietorship Registration

Identity and Address Proof

Identity and address proof will be required for all directors and shareholders of the company to be incorporated. In case of Indian nationals, PAN is mandatory. For foreign nationals, apostilled or notarized copy of passport must be submitted mandatorily. All documents submitted must be valid. Residence proof documents like bank statement or electricity bill must be less than 2 months old.

Registered Office Proof

All companies must have a registered office in India. To prove access to the registered office, a recent copy of the electricity bill or property tax receipt or water bill must be submitted. Along with the utility bill, rental agreement or sale deed and a letter from the landlord with his/her consent to use the office as a registered office of a company must be submitted.

PAN card of Applicant
Address Proof of Applicant (Voter ID, Passport, Aadhar, Driving License)
Cancelled Cheque of Bank Account
Registered Office Address Proof Electricity Bill along with • Rent Agreement plus NOC (if Rented) • Ownership proof (if Owned)
Four photographs of Applicant

Procedure For Registration

FAQ’s

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

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.

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

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.

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).

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.

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 Karnataka, they are, whereas in others they may not be.

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 and private limited companies at a later stage.