The fastest and cheapest way to start trading in your own name. LegalWiz.in handles the registrations a proprietor actually needs, from Udyam and TAN to the paperwork your bank will ask for.
A few details, then secure checkout. Your expert takes it from there.
Starting at₹1,999+ Govt. Fees
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What a proprietorship is, what "registering" one actually means, and why founders choose LegalWiz.in to set one up.
Most businesses in India start with one person and nobody else. An individual carrying on a business is the sole proprietor, and the business is a proprietorship firm. The identity of the person and the identity of the business are not separate: they share one PAN, and the assets and liabilities of one are the assets and liabilities of the other.
A lower tax rate, complete flexibility and almost no compliance are why so many businesses start here. Bringing in partners means giving up some control over how the business runs, and a proprietor who would rather keep all of it stays a proprietor.
There is no Act that constitutes a proprietorship and no register of them, so there is no certificate that says one exists. What is registered instead are the things a proprietor needs in order to operate: Udyam registration under the MSMED Act, a TAN, and the two proofs a bank asks for before it will open a current account in the firm’s name.
A proprietorship is not constituted by any Act, so what is registered is what lets you operate. Everything below is handled by your relationship manager.
Government fees are charged at actuals. Trading activities are excluded from registration under the MSMED Act and are registered under the Shops and Establishment Act instead.
A proprietorship can trade under the proprietor’s own name, but a distinct business name is what brand value attaches to.
Part of the name should suggest what the business does, so customers can connect the name to what they are buying.
There is no registry of proprietorship names, so a trademark registration is the only way to secure exclusive use of one.
The proprietor decides what the business does and how it runs, with nobody to report to and no third party involved. Compliance and disclosure through the year are minimal, so there is very little government interference either.
There is no prescribed process to set one up and it costs less than any other structure. The business runs on the proprietor’s own identity, under their own name or under a brand name they choose.
The proprietor is the only owner, so the entire profit belongs to them. Business assets are the proprietor’s assets, and it is their decision when to withdraw profit and when to keep it in the business.
A proprietorship is not taxed separately. The individual slab rates apply to the business income, which are lower than the rates for a company or a partnership, and one return covers the individual and the business together.
A proprietorship is the quickest and cheapest to start, and the only structure here that gives you no separation from the business. Compare it against the alternatives before you commit.
| Attribute | Proprietorship Firm | Private Limited Company | One Person Company | Limited Liability Partnership | Partnership Firm |
|---|---|---|---|---|---|
| Setting it up | |||||
| Applicable law | No specified Act | Companies Act, 2013 | Companies Act, 2013 | LLP Act, 2008 | Indian Partnership Act, 1932 |
| Not requiredMSME or GST registration is treated as valid proof for a proprietor firm | MandatoryMust be registered with the MCA under the Companies Act | MandatoryMust be registered with the MCA under the Companies Act | MandatoryMust be registered with the MCA under the LLP Act | OptionalCan be registered or unregistered, though there are clear benefits to registering with the State ROF | |
| Only 1The proprietor is the sole owner | 2 to 200Excluding present or former employees who are members | Only 1A single shareholder | 2 to unlimitedMinimum 2 designated partners, no cap on the total | 2 to 50Minimum 2 partners, maximum 50 | |
| Not allowedA foreign national cannot own a proprietorship business in India | AllowedUnder RBI and FEMA rules, usually via the automatic route | Not allowedMember, nominee and director must be Indian residents | AllowedUnder RBI and FEMA rules, usually via the automatic route | AllowedAn NRI can be a partner, subject to RBI regulations | |
| What you are liable for | |||||
| NoProprietor and business are the same, and share one PAN | YesCan enter contracts and own assets in its own name | YesCan enter contracts and own assets in its own name | YesCan enter contracts and own assets in its own name | NoThe firm has no identity separate from its partners | |
| UnlimitedClearing the firm’s liabilities is the proprietor’s job | LimitedLimited to the share capital subscribed, unless the MOA defines it otherwise | LimitedLimited to the share capital subscribed | LimitedLimited to the contribution agreed in the LLP agreement | UnlimitedPartners are jointly and severally liable for the debts | |
| NoDeath or insolvency of the proprietor ends the business | YesSurvives a change of ownership or management | YesBut it can only ever have one owner | YesA change of partners does not affect the LLP | NoA change of partner dissolves or reforms the firm | |
| NoA proprietorship cannot be transferred | YesShares transfer easily, which is why external investors prefer it | Restricted100% of shares must move to change the single owner | YesBy consent of the other partners, via a supplementary deed | RestrictedThe partnership deed sets out the restrictions | |
| What it costs you every year | |||||
| Not mandatoryTax audit applies based on turnover | MandatoryAn auditor must be appointed within 30 days | MandatoryAn auditor must be appointed within 30 days | As applicableRequired once turnover crosses ₹40 lakh or contribution crosses ₹25 lakh | Not mandatoryTax audit applies based on turnover | |
| LowTaxed at the proprietor’s individual income tax slab | Moderate25% for companies with turnover up to ₹400 crore | Moderate25% for companies with turnover up to ₹400 crore | High30% on business profits, with tax-efficient distribution to partners | High30% on business profits | |
| LowNo separate ITR, and very little else | HighThe heaviest of the five, both annual and event based | HighSimilar to a company, without an AGM | ModerateAnnual filing plus a few event based filings, lighter than a company | LowAn annual ITR, and little else | |
| Next step | Get started | Know more | Know more | Know more | Know more |
Swipe the table sideways, Proprietorship Firm stays in view. Open any attribute to read the detail behind all 5 answers.
Aloka was very thorough, helpful and easy to understand. Appreciate her effort to get this done so quickly.
Her approach was very helpful and the way she guided during documentation ensured that I had no problem in filling the details. Such customer service experience is rare and kudos to her and Legalwiz!!!
The experience with LegalWiz was great. Every time I had telephonic conversation, I felt I am talking to genuine person with wants to help. Website experience was not so great because order details does not reflect immediately. Please note that this was compensated by very professional helpline number. Overall its still a 10/10 experience for me. Wish you good luck for future endeavor.
Knowledgeable staff and awesome customer service. Helped me in every step of my requirements and lastly very promot service and humble team. I wish good luck to each and every member of legal wiz team. Keep rocking....
To the prompt and kind.
Overall a good experience with legalwiz..
good service
LegalWiz is the best and easiest way to take care of your business legal needs. Recommend it to all business holders.
The shortest checklist of any structure in this hub. Self-attested scanned copies are enough to begin.
A self-attested copy of the proprietor’s PAN card.
A self-attested copy of the proprietor’s Aadhaar card.
Details of the proprietor’s savings or current account.
Step 01
Step 02
Step 03
Subject to government processing time.
The lightest structure in this hub, and the quickest: 4 working days from start to finish.
1 of 4 working days
2 of 4 working days
1 of 4 working days
Subject to government processing time.
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Yes. The proprietor must be an Indian citizen and resident in India. No approval is needed before starting the business.
A non-resident Indian or a person of Indian origin can invest in or start a proprietorship business only with the prior approval of the Government of India.
None, in the sense a company has one. A proprietorship is an unorganised business structure and there is no specific law that governs registering it.
What LegalWiz.in registers instead is the business under the MSMED Act, 2006, the Micro, Small and Medium Enterprises Development Act, which is a Central Government registration the business must qualify for.
There is no minimum. A proprietorship can be started with whatever amount is enough to commence the business.
There is no restriction on putting money in or taking it out either, so the proprietor can change the capital at any time. It is entirely the owner’s decision.
The Reserve Bank of India requires the proprietor to produce TWO forms of registration for the firm, along with their PAN card, identity proof and address proof.
Any two of the following will do: Udyam MSME registration, GST registration, registration under the Shops and Establishment Act, a professional licence, or a chartered accountant’s certificate. Individual banks may ask for others under their own KYC norms.
It is not. There is no registry and no regulation covering the name of a proprietorship, so a firm can adopt any name that is available and does not infringe a registered trademark.
Because there is no registry, a trademark registration is the only way to secure the exclusive use of a business name.
No, on both counts. There is no separate identity for the proprietor and the business even after the firm is registered, so the PAN of the firm and the PAN of the proprietor are the same.
The assets and the liabilities of the proprietor and of the proprietorship are the same as well.
An entity registered under the MSMED Act can claim the subsidies, incentives and schemes the Central Government runs for that business, on the strength of the registration certificate.
Any business entity can apply.
Trading activities have been excluded from registration under the Act. A business that trades applies for registration under the Shops and Establishment Act instead.
No. A proprietorship is owned and controlled by one person, and that is the whole of what defines it.
If the business needs partners, a partnership firm, an LLP or a Private Limited Company is the structure to look at.
No. A proprietorship is owned, managed and controlled by one person, so it cannot issue shares and cannot take on investors.
An annual income tax return must be filed with the Income Tax Department. Other filings, such as GST returns, may be needed from time to time depending on what the business does and which registrations it holds.
Nothing is filed with the Ministry of Corporate Affairs. Annual accounts and reports are what an LLP or a company owes the MCA, and a proprietorship is neither.
Yes. A proprietorship can be taken over by a company or an LLP.
The procedure is cumbersome, expensive and time consuming, so it is worth taking advice on whether to start as an LLP or a company if you expect to need one.
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