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Main Advantages of Registering a Proprietorship Firm
Establishment and administration of Proprietorship Firm is very easy and cost effective
Sole ownership allows the freedom of Policy and Decision making without interference of Third Parties
Best suitable for small businesses & unorganised sector
Minimal Compliance requirements, where maintenance of books of accounts is not mandatory
The owner can withdraw profit from the business as and when required
Rate of tax applicable for individual taxation will be levied for the Business Income of Sole Proprietorship Firm
Easy conversion to Corporate Forms such as One Person Company or Private Limited Companies and LLPs with addition of Directors / Partner
Frequently Asked Questions
A Proprietorship Firm can be started with any amount of Capital. The capital to be introduced in the Business is sole decision of owner of the firm i.e. the Proprietor.
No, any other person is not required in for starting the Business as Sole Proprietor. As the name suggest, only one person is the owner of the Business and there is no requirement of any other Partner for Registration of Sole Proprietorship Firm.
The Proprietor must be an Indian citizen and a Resident of India. Non-Resident Indians and Persons of Indian Origin can only invest in a Proprietorship with prior approval of the Government of India.
Sole Proprietorship is an unregistered entity and there is no specific law enforced for the registration of Sole Proprietorship Registration. LegalWiz.in provides registration of Sole Proprietor under MSME (Micro, Small and Medium Establishments) Development Act, 2006 of Central Government.
Copy of Aadhar Card and a PAN card of the Sole Proprietor are sufficient along with the details of Business Place for online Sole Proprietorship Firm Registration.
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.
To open the bank account in the name of Sole Proprietoship Firm, Reserve Bank of India mandates that the proprietor to provide 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: MSME registration, GST registration, Registration under Shop & Establishment Act, Professional license, Chartered Accountant certificate or others as provided in the RBI Know Your Customer norms or the requirement of the respective Banks.
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.
The PAN card of the Proprietorship as well as the Proprietor is the same. Hence, the firm will not have a separate legal identity. The assets and liabilities for the proprietor and the proprietorship is the same.
The registered entity under MSMED Act can avail subsidies, incentives and schemes launched by the Central Government in respect of the specific Business on the basis of registration certificate. Know more about the benefits of MSME Registration at our blog
Any business entity can apply for this registration. However, recently,Central Government has excluded the activities of Trading to be registered under this Act. The business with Trading Activities can apply for registration under Shop & Establsihments Act at https://www.legalwiz.in/shop-establishments-registration
Alike every other entity, there are certain criteria laid down for mandatory registration under GST. Following are few general criteria for mandatory registration:
- An aggregate turnover exceeding Rs. 20 lakh in a financial year mandates registration for a dealer or service provider under this law. However, for dealers conducting business in north-eastern states of India, an aggregate turnover exceeding Rs. 10 lakh mandates a registration.
- Any online platform operator.
- Firm engaged in inter-state supply of Goods or Services.
For further information, please visit our page at https://www.legalwiz.in/gst-registration.
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 such as GST returns filing may be necessary from time to time, based on the business activity performed and registrations opted. However, annual report or accounts need not be filed with the Ministry or Corporate Affairs, which is required for Limited Liability Proprietorships and Companies.
A proprietorship can be taken over by the company or LLP. However, the procedures for same are cumbersome, expensive and time-consuming. Therefore, it is wise for many entrepreneurs to consider and start a LLP or Company instead of a Proprietorship.
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A sole proprietorship is an unincorporated business owned by one person. If one wants to start a new business with small capital and with low risk involved, sole proprietorship is a good option to begin with. Later if the business grows it can be converted into a One Person Company or other business formations. LegalWiz.in has a team of qualified professionals, company secretaries and chartered accountants who are always at your service to handle all the matters relating to registration of sole proprietorship online putting you and your company at ease. We assure highest quality standard backed by 100% customer satisfaction and see to it that all the legal and administrative aspects of registration of your sole proprietorship online are taken care of. For registering your sole proprietorship online you need to follow few simple steps and provide certain information relating to your sole proprietorship firm and LegalWiz would get you sole proprietorship firm registered in no time. Subject matter experts are available on call or via email to answer your queries. We also provide a full spectrum of post registration services related to Shops & Establishments Registration, MSME, Trademark Registration, Copyright, Legal Drafting, Accounting & Bookkeeping, Import Export Code, GST Registration etc. We offer services through an online model and a network of trusted affiliates across all major cities in India including Mumbai, Delhi, Ahmedabad, Pune, Bangalore, Hyderabad, Vadodara, Kolkata, Chennai, Noida, Gurgaon, Surat, Rajkot and others.