Proprietorship Registration

START YOUR BUSINESS IN JUST 1 DAY

Starting your business as a proprietorship is easy when done by RPG Legal. A proprietorship needs only a few essential registrations. Our dedicated team will help you with all the documentation. We extend our support from documentation to preparation and filing.

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How to Start Sole Proprietorship Firm in India

A proprietorship business is the simplest & manageable form of business, which can be started or closed at the will of its owner, also known as proprietor. There is no law which requires a proprietorship to be registered, hence the registration of proprietorship firm is not possible as required in case of a company, LLP or partnership firm.

However, there are various registrations or licenses which may be needed for a proprietorship business depending on the nature of activity like GST, FSSAI, Drug License, PSARA etc. Bankers may also ask for two KYC documents in the name of the firm to open a Current Account in the name of Proprietorship Firm. So, proprietorship business is ideal for small businesses and first time Entrepreneurs who would like to get a taste for business. We are always available to assist in the starting proprietorship firms pan India.

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Advantages of Sole Proprietorship Firm

Just Think and Start

Since there are no registrations or licenses are required to start a sole proprietorship firm. If you open your doors and start doing business, you just created a sole proprietorship. The most significant advantage in starting a Proprietorship is the ease of setup and less paperwork.

Relatively Inexpensive

Compared to other forms of businesses, Proprietorship is less expensive. No minimum capital is prescribed and it can be based on business requirements. Proprietorship can be formed without any legal formality. Thus Proprietorship Firm is economical to form and operate.

All Income Goes to Owner

In Sole proprietorship firm, owner or proprietor keeps all the profits of the business to themselves. They are not required to share the income or profit with other stockholders or investors as they would with different types of business structure, such as Partnership, LLP & Companies.

Control over the business

Sole proprietorships have only one owner, but they are allowed to have employees. The owner controls everything that goes on in the business and does not have to seek the approval of a board of directors, stockholders or anyone else.

Secrecy

It is easy to maintain secrecy in a sole proprietorship business. This is because, as per the provisions of the law a sole proprietorship business is not required to publish its books of accounts, annual reports and other confidential information.

Tax Benefit

The PAN of the Proprietor and Proprietorship firm is the same. The income of the proprietorship Firm includes in the income of its proprietor itself. Hence slab based income tax rates apply, which results in a substantial tax benefit.

Documents Required to Register Proprietorship

Documents of Proprietor

Two Photograph
Copy of Pan Card
Valid Identity Proof
Latest Address Proof
Cancelled Cheque of Proprietor

Documents of Premises

Utility Bill in name of Owner to the premise
Rent Agreement or
Lease deed, sale deed, Property Tax Receipt
NOC from the Owner of Premise

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FREQUENTLY ASKED QUESTIONS

How many people are required to register a sole proprietorship firm ?

In India, a single person is required to start a Proprietorship, and a Proprietorship can have only one promoter.

What are the minimum requirements to start the sole proprietorship ?

Any Indian citizen can start a proprietorship Firm in India. Registration or license may or may not be required, depending on what business activity you are planning to establish.

Can a foreigner person or foreigner entity invest in the proprietorship firm ?

No foreign funding is allowed in a proprietorship form of business. However, an NRI or a Person of Indian Origin (POI) can invest in proprietorship with prior approval from the Central Government of India.

Do I need to invest fix capital while starting my proprietorship business ?

For starting a proprietorship business, there is no limit on the minimum capital. Therefore, Proprietorship firm can be started with any amount of money.

Do I need to apply for the new PAN number to start the business ?

No, Only Proprietor’s PAN number is required to start the business process.

How to open a current bank account for a Proprietorship ?

Bankers Required two KYC documents in the name of the firm to open a Current Account in the name of Proprietorship Firm.

Will my Proprietorship firm have a Certificate of Registration ?

Proprietorship firm does not have a Certificate of Incorporation or Certificate of Registration as it does not have a separate legal entity. However, for its legal recognition, the registration may be obtained under GST, Shop & Establishment or MSME Department.

What are the compliances required ?

Being a sole proprietorship, you must file Income Tax Return and TDS return. Also, you need to submit your GST Returns if you obtained GSTIN.

How can a Proprietor get the name of a Proprietorship business ?

Since there is no regulation or registry for registering the name of a proprietorship, You can adopt any name and protect that name under the trademark to prevent the duplicacy of your trade name.

Can a Sole Proprietorship business be later converted into a company or LLP ?

Yes, conversion of sole proprietorship into partnerships and private limited companies at a later stage can be done. However, the procedures to convert a proprietorship business into a Company or LLP are a little complex, expensive and time-consuming. Therefore, it is recommended for many entrepreneurs to consider and start an LLP or Company instead of a Proprietorship.