Proprietorship Registration

A sole proprietorship is a type of unregistered business entity that is owned, managed and controlled by a person. The sole proprietorship is one of the most common forms of business in India, which is used by most of the micro and small businesses operating in unorganized sectors. It is very easy to start proprietorship and there is very little regulatory compliance requirement for starting and operating. However, after the startup phase, proprietorships do not provide promoters a host of benefits such as limited liability proprietorships, corporate statuses, separate legal entities, independent survival, transfers, perpetual survival – which are desirable characteristics for any business. Therefore, proprietary registration is only suitable for unorganized, small businesses which will remain for a limited period of time and/or survival.

No mechanism has been provided by the Government of India for registration of proprietorships. Therefore, the existence of a proprietorship should be established through tax registration and other business registrations, which must be in accordance with the rules and regulations for a business. For example, GST registration can be obtained in the name of proprietor that the proprietor operates a business as a sole proprietorship. Thus, all the registrations for a proprietorship will be on the name of the proprietor, making the proprietor individually liable for all liabilities of proprietorship.

Articles to read before the registration of proprietorship

Proprietary startup…!

Process and documents were added to start proprietorship in India. A sole proprietorship is the most common form of business in India. Any Indian citizen can easily start proprietorship

Advantages Disadvantages

The only ownership is the most comprehensive form of business ownership in the world. As the name suggests, it is a type of business in which a single individual is vested with the business property and the ownership of the matters. In this article, we see the advantages and disadvantages of a proprietary firm.

Company's proprietorship

The process of conversion of proprietorship into a private limited company provides significant benefits on the proprietary firm.

Proprietary bank account

Process to open a sole proprietary bank account Reserve Bank of India has set the Know Your Customer (KYC) norms to open a current account in the name of sole proprietorship with the list of necessary documents.

Proprietary tax rate

Under the Income Tax Act, all owners below the age of 60 years are required to file income tax returns when the total income exceeds Rs. 2.5 lakhs Income tax rate for proprietorship is slab based, which starts from 10% for the income and Rs. Rs 25 lakh to Rs. Up to 5 million.

Proprietary tax filing

File an online income tax return of the proprietorship firm with the help of expert. Proprietary firms need to file tax returns in each financial year, if taxable income is Rs. More than 25 lakhs eMindsCA.com, the proprietary file provides accounting and tax return filing services to help tax returns.

GST registration

GST registration process, eligibility and required documentation. Institutions with an annual revenue exceeding 20 lakh rupees will have to get GST registration. Get your GST registration online with the help of an expert in eMindsCA.com and get your GSTIN in less than a week from the comfort of your home.

GST Return Filing

Return GST online file through eMindsCA.com with GST Expert Support You can file GSTR-1, GSTR-2, GSTR-3 and GSTR-4 online through eMindsCA.com. In addition to filing GST Returns, you can also issue GST invoices and record purchases on LEDGard so that GST can be filed automatically.

Trademark registration

Online Trademark Registration, Trademark Search, Documentation and Expert Support for TM Filing. Submit your trademark application for just Rs.6000 in less than a day from the comfort of your home. eMindsCA.com offers a number of trademark services from trademark filings to dealing with objections.

BASIC

all inclusive fees

Rs.2500
  • TAN Registration
  • Udyog Aadhar Registration
  • GST Registration
STANDARD

all inclusive fees

Rs.5000
  • TAN Registration
  • Udyog Aadhar Registration
  • GST Registration
  • 3 Months GST Return Filing (GSTR-1 or 3B)
PREMIUM

all inclusive fees

Rs.15000
  • TAN Registration
  • Udyog Aadhar Registration
  • GST Registration
  • 3 Months GST Return Filing (GSTR-1 or 3B)
  • Bookkeeping
  • ITR-3 Return Filing
  • Trademark Filing

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How many people are required to start a proprietorship?

Only one person is required to start a proprietorship and only one promoter in a proprietorship.

What are the requirements for being a proprietor?

Proprietor should be an Indian citizen and resident of India. Individuals of NRI and Indian Origin can only invest in a proprietorship with prior approval of the Government of India.

Which documents are necessary to start proprietorship?

With proof of identification and address, the PAN card for the proprietor is sufficient to start a proprietary shipment and obtain other registration as applicable or required.

What is the need for capital to start proprietorship?

There is no limit to minimum capital to start proprietorship. Therefore, a proprietary shipment can be started with any amount of minimum capital.

How will eMindsCA.com help me start a proprietorship?

An eMindsCA.com Associate will understand your business needs and will help you start a proprietorship by obtaining relevant registrations. eMindsCA.com will help the Proprietor in the name of business to get the necessary registration to help open a bank account, thereby proving an identity for the business.

How to open a bank account for proprietorship?

In order to open a bank account for a proprietorship, the Reserve Bank of India says that the proprietor provides two forms of registration for proprietorship with PAN card, address proof and address proof of the proprietor. Two forms of registration can be either: MSME registration, GST registration, shop and establishment act registration, business license, Chartered accountant certificate or others who have been provided in RBI, Know your customer’s criteria.

Will my proprietorship firm have a different legal identity?

No, the proprietorship firm and proprietor are the same. The pan card of the proprietor will be the pan card of the proprietary shoe business. Apart from this, there will be no separate legal identification for the business. Proprietary business and proprietor’s assets and liabilities will be one and the same.

Will my proprietorship firm have a certificate or registration?

Proprietary firms do not have an incorporation certificate or registration certificate. The identity and validity of a proprietorship firm is established by registering with concerned or applicable government officials.

How to enter the name of proprietorship?

There is no registry or regulation for registering a proprietary shipment. Therefore, the proprietorship firm can adopt any name that does not violate the registered trademark. Since there is no registry or regulation to register the name of proprietorship, therefore, the only way to ensure the exclusive use of the business name is to obtain a trade name trademark registration.

How do I transfer my proprietary shipment?

The business operated by the proprietorship firm can not be transferred to any person other than the limited liability partnership or the private limited company. Only property in proprietorship can be transferred to another person through sale. Intangible assets like government approval, registration etc. can not be transferred to another person.

Can other people invest in a proprietary shipment?

Proprietary firm is a business entity that is owned, managed and controlled by a person. Therefore, proprietorship firms can not issue shares or they do not have an investor.

What are the annual compliance requirements for a proprietary shipment?

The proprietorship will have to file its annual tax return with the Income Tax Department. Other tax filings such as service tax filing or GST filament may be required depending on the business activity performed from time to time. However, annual reports or accounts should not be filed with the Ministry of Corporate Affairs, which is essential for limited liability partnerships and companies.

Is audit necessary for proprietorship?

It is not necessary for proprietorship to prepare audited financial statements each year. However, a tax audit may be necessary on the basis of turnover and other criteria.

Can I switch my proprietorship to company or LLP later?

Yes, there are procedures for converting your proprietary business into a company or LLP at a later date. However, the procedures for converting proprietorship business to company or LLP are cumbersome, costly and time-consuming. Therefore, it is prudent to consider and start an LLP or company rather than a proprietorship for many entrepreneurs.

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