Proprietorship

Rs.5,990.00

A sole proprietorship is a type of unregistered business entity that is owned, managed, and controlled by one person.

Proprietorship

Price: Rs.5,990.00

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A sole proprietorship is a type of unregistered business entity that is owned, managed and controlled by one person. Sole proprietorships are one of the most common forms of business in India, used by most micro and small businesses operating in the unorganized sectors. Proprietorships are very easy to start and have very minimal regulatory compliance requirements for starting and operating. However, after the startup phase, proprietorships do not offer the promoter a host of benefits such as limited liability protection, corporate status, separate legal entity, independent existence, transferability, perpetual existence – which are desirable features for any business. Therefore, proprietorship registration is suited only for unorganized, 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, 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.

The average time taken to complete Proprietor Registration is about 3-5 working days, subject to government processing time and client document submission. Get a free consultation for Proprietorship registration and business startup by scheduling an appointment with a TaxFino Expert.

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Benefits

  • Suitable for small businesses

  • Minimal Compliance Requirement

  • Single ownership & control over Business

Eligibility

Proprietorships can be started in India by an Indian Citizen. Since, there is no legal entity, the Proprietors PAN is used as the basis of all registrations and compliance.

OUR PRICING PLANS

Pricing Package Comparison

Proprietorship Firm Plan
Rs.4,990
PAN Yes
TAN Yes
Regular Compliance Updates Yes
GST Registration Yes
MSME (Udyog Aadhaar) Registration Yes
Shop & Establishment Act Registration Yes
Email & Telephonic Support Yes
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Documents

  • Photograph
  • pan card
  • Utility Bill (not older than 2 months)
  • If rented, then NOC from owner
  • ID Proof (Any of the following)
    • Voter ID Card
    • Passport
    • Driving License
  • Address Proof (Any of the following)
    • Bank statement
    • Electricity bill
    • Telephone/Mobile bill
FAQ

Do you have Any Question?

How to open a bank account for a Proprietorship?

To open a bank account for a Proprietorship, Reserve Bank of India mandates that the proprietor provides two forms of registration for the Proprietorship along with the PAN Card, identity proof and address proof of the Proprietor. The two forms of registration can be any two of the following: service tax registration, MSME registration, GST registration, shop & establishment Act registration, Professional license, Chartered Accountant certificate or others as provided in the RBI Know Your Customer norms.

No, the Proprietorship firm and the Proprietor are one and the same. The PAN Card of the Proprietor will be the PAN Card of the Proprietorship business. Therefore, there will be no separate legal identity for the business. The assets and liabilities of the Proprietorship business and the Proprietor will also be one and the same.

Proprietorship firms do not have a Certificate of Incorporation or Certificate of Registration. The identity and legitimacy of a Proprietorship firm is established by registering with the relevant or applicable Government authorities.

There is no registry or regulation for the registering the name of a Proprietorship. Therefore, proprietorship firms can adopt any name that do not infringe on registered trademarks. Since there are no registry or regulation for registering the name of a Proprietorship, the only way to ensure exclusive use of the business name is to obtain a trademark registration of the business name.

A business operated by proprietorship firm cannot be transferred to another person, unlike a Limited Liability Partnership or a Private Limited Company. Only the assets in the Proprietorship can be transferred to another person through sale. Intangible assets like Government approvals, registrations, etc. cannot be transferred to another person.

Proprietorship firms are business entity that are owned, managed and controlled by one person. So Proprietorship firms cannot issue shares or have investors.

Proprietorship will have to file their annual tax return with the Income Tax Department. Other tax filings like GST filing may be necessary from time to time, based on the business activity performed. However, annual report or accounts need not be filed with the Ministry or Corporate Affairs, which is required for Limited Liability Partnerships and Companies.

It is not necessary for Proprietorships to prepare audited financial statements each year. However, a tax audit may be necessary based on turnover and other criterion.

Yes, there are procedures for converting your Proprietorship business into a Company or a LLP at a later date. However, the procedures to convert a proprietorship business into a Company or LLP are cumbersome, expensive and time-consuming. Therefore, it is wise for entrepreneurs to consider and start a LLP or Company instead of a Proprietorship.

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