Proprietorship Firm Registration

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Proprietorship Firm Registration- An Overview

If a person wants to start a business by one person, then a proprietorships business will be a good choice for the individual. A proprietorship firm is a well-known business type in India. A proprietorship firm is started by one person and owned by one person. All the operations and activity did by a single person and are also responsible for all types of works.

Benefits of proprietorship firm

Easy to establish:

This type of business is very easy to establish. There are no specific processes to establish a proprietorship business. In this type of business, the individual can operate the business on their name or any other name. Cost of the registration of proprietorship is very less compared to any other type of business.

Tax benefits:

This type of business is not treated as separate in the income tax slab. Income of the proprietorship business is treated as income of the individual, therefore the income of above Rs. 250000 per annum is taxable like any individuals’ income.

No Boss:

In a proprietorship business, the proprietor is a boss of the business there is no any other person, who can interfere in the business. The proprietor is the owner of all the shares of the profit of the business. The proprietor can take decisions according to their situation and condition, he/she can change the operation of the business or any other things.

Owner of your Business:

In a proprietorship business, the proprietor is the owner of whole business, no one can take their profits of revenue. All the assets of the business is treated like the proprietor’s assets and the assets of the proprietor is treated as the business.

Required document

In proprietorship firm, there are fewer compliances to register the business therefore, the number of required documents is very less.

Pan card:

For proprietorship firm registration the PAN card of the owner is required.

Adhar Card:

Adhar card of the proprietor is required for the registration of proprietorship firm.

Bank detail:

Current account of the business is required for the proprietorship firm.

Frequently Asked Questions

1. Who can be a Proprietor?

The Proprietor must be an Indian citizen and a Resident of India.

2. Will Proprietorship Firm have Certificate of Incorporation?

Proprietorship firms do not have a Certificate of Incorporation.

3. How much money do I need to invest upfront in starting the business?

There is no limit on the minimum capital for starting a Proprietorship. Therefore, a Proprietorship can be started with any amount of minimum capital.

4. How to open a Bank account for a Proprietorship firm?

To open a bank account for a Proprietorship, Reserve Bank of India mandates that the proprietor must provide two forms of registration for the Proprietorship firm 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, VAT/TIN/CST registration, Shop & Establishment Act registration, Professional license, Chartered Accountant certificate or others as provided in the RBI Know Your Customer norms.