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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Sole Proprietorship Firm

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.

Benefits of Proprietorship Firm Registration

You Are Your Own Boss
A Sole proprietorship firm, the proprietor has all the rights to decide what to do and how to operate. A proprietor neither needs to report someone nor take orders from anyone else. Unlike a corporate firm, there are minimal compliances or disclosure requirements during the whole financial year. Hence, Government interference is also very less.
Easy To Establish
Proprietorship Firm Registration Process is simpler as there is no specific process to be followed to setup this business. Also the cost of sole proprietorship firm registration is very less compared to any other business structure. The business runs on the identity of the proprietor himself.
You Own Whole Share Of Profit
The proprietor is only owner of the business and therefore he owns the whole share of the business profit. Also, the business assets are treated as assets of the proprietor and vice-versa. He can decide when to withdraw profit or to reserve.
Tax Benefits
Proprietorship firm is not treated separately in for income tax purpose. The tax slab as specified for an individual’s income is only applicable to the income of the business. The rates of tax are lower compared to other business structure like company and partnership. The benefit of deductions is an added advantage with combined ITR for individual and the business.
Pan Card
A self-attested copy of PAN Card of proprietor
Aadhar Card
Self- attested copy of Aadhar Card of proprietor
Bank Details
Details of the saving or current account of bank
Rent Agreement
Rent Agreement and NOC from the owner of the place of business, if rented

Documents Required For Proprietorship Firm Registration

To start a Sole Proprietorship firm, the following documents are required

Documents Required For Opening A Current Account

To open a current account, the following documents are required;
  • Proof of the existence of your business
  • Shops & Establishments Act Registration
  • PAN card
  • Address and Identity proof

How Bharat Register Executes Proprietorship Registration Procedure Professional Guidance

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.

Key registrations

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 registration

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

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

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

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.

FSSAI registration

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.

Current account

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.

Make Application in 3 Easy Steps

1. Answer Quick Questions
  • 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
2. Relax While Team of Experts Get It All Done
  • Assigned Relationship Manager
  • Preparation and filing of Application
  • Registration under MSME Department
  • Firm Seal
  • Allotment of TAN
3. Establishing a Sole Proprietorship Firm
Any Indian citizen with a current account in the name of his/her business can start a sole proprietorship firm. Registration may or may not be required, depending on the type of business that is planned to be established. However, to open a current account, banks typically require a Shops & Establishments Registration.
Sole Proprietorship Firm business does not take more than 15 days to set-up and start functioning. This simplicity makes it popular among small traders and merchants. It's also much cheaper, of course. This is the other reason why it's the most widely used business structure.
Most local businesses are run as sole proprietorship firm, from grocery stores to fast-food vendors, and even small traders and manufacturers. That is not to say that larger businesses cannot operate as sole proprietorships, they can! Jewellery shops are sole proprietors, but it is not recommended.

Yes, you can do this but it requires lengthy paperwork and formalities.

It takes approximately 15 days to start a proprietorship firm.

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.

Compare and know which company type most suits you

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


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

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Here's How it Works

1. Fill Form
Simply fill the above form to get started.
2. Call to discuss
Our startup expert will connect with you & prepare documents.
3. Get Certificate
Get your company incorporation certificate

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