Proprietorship Firm Registration India
Proprietorship Firm is a business that is owned by one person. It is the simplest form under which a company can operate. This business does not have any separate identity under the law. It can also be operated under the name of its proprietor.
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Most businesses in India start individually without other’s participation. An individual carrying out business activities is the sole proprietor and its business entity is said to be a Proprietorship Firm. The identity of an individual and the business are not different from each other. But due to the lower tax rate, flexibility and multiple advantages people prefer this structure for the early stage of business. With the inclusion of partners, the control over operation reduces. Hence, these proprietors choose to run the business single-handedly and land upon sole proprietorship firm registration. Although there is no specific Act to regulate this organization, there are many ways to register a Sole Proprietorship firm. Small businesses aiming to take lower risks prefer this structure.
You Are Your Own Boss
Easy To Establish
You Own Whole Share Of Profit
Tax Benefits
Pan Card
Aadhar Card
Bank Details
Rent Agreement
To start a Sole Proprietorship firm, the following documents are required
- Address and identity proof
- PAN card, KYC documents and
- Rental agreement or sale deed (in case of Shops & Establishment Act Registration)
- Proof of the existence of your business
- Shops & Establishments Act Registration
- PAN card
- Address and Identity proof
Professional Guidance
At Bharatregister we will give you professional guidance on many of the processes involved in registering your business as a sole proprietorship firm, along with registration of service tax, sales tax, import/export code, and professional tax.
Vendor Relationship
Our team will connect you with an established vendor who will book your application and also keep you updated on its status and progress. The vendors we have onboard are well-accomplished and skillful in managing native registrations.
15 Business Days
Our team at Bharatregister will offer full assistance with the registration process. This could vary between 5 and 15 days, depending on the task at hand for the authorities involved.
Each proprietorship differs in terms of the functions, clientele and the mode of operations. Hence, a couple of the registrations mentioned below will be applicable.
MSME or Udyog Aadhaar registration can be obtained in the name of the business to establish that the sole proprietorship is registered with the Ministry of Micro, Small and Medium Enterprises.
TAN registration must be obtained for the proprietor from the income tax department if the proprietor is making salary payments wherein TDS deduction is required.
GST registration must be obtained if the proprietor is selling goods or services that cross the GST turnover threshold limit for registration. In most states, GST registration is required for service providers having annual revenue of more than Rs.20 lakhs and in case of traders - annual revenue of more than Rs.40 lakhs.
Import Export Code or IE code can be obtained from the DGFT in the name of the business - in case of a proprietorship business undertaking export and/or import of goods into India.
In case the proprietorship is involved in the selling of food products or handling of food products, FSSAI registration must be obtained from the Food Safety and Standard Authority of India in the name of the proprietor.
A current account can be opened for a sole proprietorship through Bharatregister from various banks in India. Bharatregister offers exclusive partnerships through which zero-balance current accounts can be opened. It is recommended that GST registration be obtained for the same.
- Pick a Package that best fits your requirements
- Fill in our questionnaires that take less than 10 minutes
- Provide basic details & documents required for registration
- Make payment through secured payment gateways
- Assigned Relationship Manager
- Preparation and filing of Application
- Registration under MSME Department
- Firm Seal
- Allotment of TAN
- All it takes is 4 working days
Yes, you can do this but it requires lengthy paperwork and formalities.
GST registration is only mandatory, if your annual turnover is more than Rs 40 lakh otherwise is an add-on for your registration application. However, if you are residing in a north-eastern state of India and maintain a turnover of 20 lakh then only GST registration is mandatory.
Managing Your Business
Private Limited Company
Limited Liability Partnership
One Person Company
Partnership Firm
Proprietorship Firm
Governing Act
Companies Act, 2013
Limited Liability Partnership Act, 2008
Companies Act, 2013
Indian Partnership Act, 1932
No specified Act
Registration Requirement
Registration under Companies Act is mandatory
Registration under LLP Act is mandatory
Registration under Companies Act is mandatory
Optional
There is no registration criteria prescribed. But, registration is recommended
Number of members
2 - 200
2 - Unlimited
Only 1
2 - 50
Only 1
Separate Legal Entity
It is a separate entity and can own assets in its name
It is a separate entity and can own assets in its name
It is a separate entity and can own assets in its name
It is a separate entity and can own assets in its name
Proprietor and business are considered the same
Liability Protection
Limited up to the total value of shares subscribed
Limited up to the value of shares subscribed
Limited up to the total value of shares subscribed
Partners are jointly and severally liable to pay the debts of the Partnership Firm
Proprietor’s liability is to pay-off all the debts and obligation of the firm
Statutory Audit
Auditor must be appointed within the 30 days of incorporation
Applicable when turnover exceeds INR 40 Lakh or contribution exceeds INR 25 Lakh
Auditor must be appointed within the 30 days of incorporation
Statutory audit not applicable. Tax audit may be applicable based on turnover
Statutory audit not applicable. Tax audit may be applicable based on turnover
Ownership Transferability
Shares can be transferred with the consent of other Shareholders
Ownership can be changed with consent of other partners
Shares are not transferable easily
Ownership is not transferable easily, clause of partnership deed should be referred
Firm is no different from proprietor and so ownership is not transferable
Uninterrupted Existence
Perpetual existence as the management and owners are different. Ownership is easily transferable
Change in Partners or Designated Partners does not affect the existence of LLP
Perpetual existence. The nominee will take place of member
Change in partner leads to dissolution or formation of another partnership firm
Death or insolvency of proprietor directly affects the firm
Foreign Participation
Foreign national are allowed to invest under the Automatic Route
Foreign nationals are allowed, subject to FDI Guidelines
Member, nominee and director must be an Indian resident
Foreign nationals are not allowed to be a partner
Foreign Nationals cannot commence proprietorship business
Tax Rates
Tax rate applicable for small companies is reduced to 22%, dividend distribution tax applicable
With tax rate of 30% on business profit, no tax on income distribution to partners
Tax rate applicable for small companies is reduced to 22%, dividend distribution tax applicable
With tax rate of 30% on business profit, no tax on income distribution to partners
Tax rates of individual applied to Proprietorship Firm
Statutory Compliances
Companies have to meet high compliance requirements
Lesser compliance requirements compared to companies
Separate ITR of partnership is filed, else there is no filing requirement
With tax rate of 30% on business profit, no tax on income distribution to partners
No compliances and no requirement to file a separate ITR
1. Fill Form
2. Call to discuss
3. Get Certificate
