Register a Sole Proprietorship
Registration starts @ Rs. 999 (all inclusive)
Proprietorship is an alias for the Proprietor to do business. Proprietorships are ideal for very small businesses in the unorganised sector
A sole proprietorship is a type of unregistered business entity that is owned, managed and controlled by one person. Sole proprietorship's are one of the most common forms of business in India, used by most micro and small businesses operating in the unorganised sectors. Proprietorships are very easy to start and have very minimal regulatory compliance requirement for started and operating. However, after the startup phase, proprietorship's do not offer the promoter a host of benefits such as limited liability proprietorship, corporate status, separate legal entity, independent existence, transferability, perpetual existence - which are desirable features for any business. Therefore, proprietorship registration is suited only for unorganised, 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.
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Why register a Sole Proprietorship Firm?
Quick Decision Making
Control over all business decisions remains in the hands of the owner. This ensures quicker business decision making and hence, faster execution.
Easy To Start
The registration process for starting a sole proprietorship firm is very easy. One can get Registration Certificate within 1 working day. Obtaining a GST registration is also very quick and easy.
Easy to close
As there is no legal distinction between the proprietor and the proprietorship firm, not much regulatory formalities are required for closing of a proprietorship.
A Sole Proprietorship is inexpensive as compared to all other forms of organizations. Also on account of the minimum compliance requirements, it is inexpensive even in long run. There are minimal compliance filings and many concessions in various laws.
What are the requirements to be a Proprietor?
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.
Can I later convert my Proprietorship into a Company or LLP?
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 many entrepreneurs to consider and start a LLP or Company instead of a Proprietorship.
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 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: 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.
How to register the name of a Proprietorship?
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.