Quick and Easy Proprietorship Incorporation
Register your Sole Proprietorship today
- Service Consultation
We help you select right registration to recognise your proprietorship firm
- Tax Registration
Obtaining Local Tax Registration and take the business on the move
- Fast and Hassel Free
Complete documentation, support with hassel free speedy process
What is Sole Proprietorship Firm ?
It is the most simpler, affordable and highly popular mode of business in India, widely used by Small traders and startups during initial launch of their venture.
There is no formal law or govt. body which issues Registration of Proprietorship business, thus no registration of Proprietorship firms is being done in India.
However, there are various local tax laws applicable to every business including Proprietorship firm, under which registration can be taken to substantiate the business proof for bank account opening in the name of the firm. Most common Registration for Proprietorship firms are taken under Shop and Establishment (Gumasta) under State Municipal Law or MSME registration of Small and Medium Enterprises or Professional Tax Enrollement Certificate under State Laws. All such registrations are obtained in the individual name of Proprietor with Trade name which establish identity of sole proprietorship, however individual proprietor is personally liable for all the liabilities of business.
Proprietorship form of business is recommended only for limited existence purpose during initial phase of business, as the same do not offer long term benefits in case of expansion requirements of Independent Legal Status, Limited external liability, Ease in Fund raising, , ability to transfer business and organised management control.
India Kickstart team is keen to assist you for incorporating your proprietorship business by obtaining local tax and regulatory registrations as applicable to your business.
Advantage of Proprietorship Firm:
It is very easy to start proprietorship as it does not require specific incorporation and one of the fastest mode of starting a business in less than 15 days period. One needs to obtain only tax registrations like either Gumasta, VAT, Service Tax or GST based on nature of their business to justify identity of Proprietorship firm for Bank account opening and smooth functioning of business with simple document requirements of PAN Card and Address proof to complete entire formalities.
Proprietors are free to choose any business name of their choice, they just have to ensure that trade name choosen is not already protected under Trademark Laws to avoid infringements at later stage. Once can also protect Business Name as well as Logo of Proprietorship Firm by way of securing Trademark Registration, which can prevent anybody copying the similar name/logo in future.
There is no mandatory law to get registration of proprietorship firm. Sole Proprietorships are only recognised via their government and tax registrations, so the extent of their compliance is limited to the annual filing of their VAT, Service Tax, GST Returns in the name of Firm.
There are very limited compliances under Income Tax laws to be followed and thus no mandatory Audits as exists in case of Private limited companies. Only Tax Audit needs to be done if turnover/ profits of proprietorship firm breaches the criteria prescribed under Income Tax.
Cost of starting proprietorship firm is relatively lower. Registration cost will be incurred only to procure tax registrations. As there are hardly any mandatory compliances to be done year on year, maintenance cost remain minimal as compared to LLP / private limited companies.
Sole Proprietorship is entirely owned and controlled by Single person, thus offers immense benefit of Direct control over ownership and management of business and does not necessitate large management teams. Due to single ownership and cost benefit aspects, it is the most preferred choice of business model among small business and traders.
Under Income Tax laws, Business profits from Proprietorship firms are taxed in the hands of Individual Owner. Hence, slab-wise Tax rates will be applicable upto Total Profit of Rs.10 Lacs in a year at 10/20/30% respectively, as compared to flat 30% tax in other forms of business, reducing overall tax liabilities.
How can we help with Sole Proprietorship Registration Process
We can get your Proprietorship Firm incorporated in less than 10 working days, subject to govt. processing time with following Steps :-
We will help you decide what registration you need, whether Service tax, VAT, Udyog Aadhar (SSI), professional tax or Shops and Establishments Act registration. We will also inform you of the documents you need to get started and our advisors will help with best way to establish identity of your firm along with process of opening of Bank Account.
Depending upon nature of your business, we will help you obtain Tax Registration under VAT, Service Tax, GST laws with complete documentation and formalities will be handled by us. We will inform you entire process, documentation, prepare and submit application to govt. and eventually obtain tax registration for your business with complete support and professional approach.
Post obtaining Tax Registration, we will inform you on mandatory tax return filings and compliances needs to be adhered. Based on your requirements, you can continue to avail our Support for managing entire Tax Filings and business compliance services for your sole proprietor without any hassel.
FAQ on Sole Proprietorship
A : Any Individual / HUF can start Sole Proprietorship firm. As the name suggest, it only require One Individual (person should be resident/citizen of India) and can legally carry on business in India. The person who carries on business is called Sole Proprietor of the Firm.
A: Firstly, you need to decide on Business Name (E.G. M/s. ABC Enterprises – Proprietor Mr. XYZ), Secondly you need to open Current Account with any Bank of your choice in the name of firm. Once bank account is opened, you can begin financial transactions and pay / collect cheques in the name of your Proprietorship firm.
A : For opening of Current account, mostly banker ask for any one of the Business Tax Registration like Gumasta (Shop and Establishment License), VAT, Service Tax, GST, MSME etc) as per the nature of business. Additionally you will need PAN Card copy of Proprietor and business address proof and firm’s rubber stamp.
A: Generally, it’s a speedy process and normally takes less than 15 working days to get all the required documentation and business license for proprietorship bank account opening purpose.
A: Tax registrations are commonly applicable to all forms of business, whether proprietor, partnership or Company, as tax registrations requirements depends on nature of business. If you’re dealing in Materials (Manufactuer, retailer, wholesalers, re-sellers) then VAT registration would be needed. However, if you’re Service provider (like Beauty Parlour, Architect, Consultants etc.) then Service Tax Registration be applicable.
A: You can obtain Shop and Establishment License (Gumasta) governed by Local Municipal Law or even Udyog Aadhar (MSME) registration or Trademark/Logo Registration, which can help recongnise your firm as Proprietorship and also acceptable for Bank account opening and business registration evidence.
A: Generally In India, Sole proprietorship is best and popular choice amongst Small Traders, Retailers, Shop Keepers who largely deals in un-organised market or there is no need of corporate structure. People choose sole proprietorship for its inexpensive cost, easy to handle and single owner control purpose as preferred reasons.
A: Yes, practically you can convert to partnership or Private Limited Company in future, however the process remains tedious and time consuming.
Documents required for Proprietorship Firm
Copy of PAN Card of Proprietor
Copy of Rent agreement (If rented property)
Landlord NOC (Format will be provided)
Passport size photograph of Proprietor
Latest Electricity/ Maintenance bill (Place of Business)
Copy of Aadhaar Card/ Voter identity card
Copy of Property papers (If owned property)
Why India Kickstart?
About India Kickstart
Just tell us a little bit about your business and you’ll have the incorporation certificate in 20 working days. It’s that simple. In addition to yours, we’ll be handling around 400 requests this month.
We make your interaction with government as smooth as is possible by doing all the paperwork for you. We will also give you absolute clarity on the process to set realistic expectations.
Our team of experienced business advisors are a phone call away, should you have any queries about the process. But we’ll try to ensure that your doubts are cleared before they even arise.