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A sole proprietorship is referred to a business that a single person owns. It is a type of unregistered business entity owned, managed, and controlled by an individual. It is one of the most common types of business ownership in India. The business comes under an unorganized sector and doesn't have a separate identity. They are run under a proprietor's name.
A proprietor is a person who is running a proprietorship business in India. A proprietor doesn't need a separate business PAN card. Their personal PAN card is enough for obtaining any business certification or license. A proprietor holds the sole liability of a business in case of issues or losses.
A sole proprietorship is one of the most accessible forms of registration since any specific government laws do not operate it. Here's what you will need to register your proprietorship business in India.
Adhaar card is mandatory for registering a proprietorship business. You can file your income tax only when you have linked your PAN to your Adhaar.
Your personal PAN card is used as your business PAN card in a proprietorship business. A copy of your PAN is required during the incorporation process.
You will need a current account for operating a proprietorship business. You can go to your nearest bank and get it done.
Registered office proof is mandatory. If you are operating from a rented property, you need to show your rental agreement and the owner's NOC. In the case of a self-owned property, your electricity bill or any other address proof will be required.
In a sole proprietorship that are few other documents that you will need. That includes:
This type of business holds a series of advantages for the owner. Have a look:
The process is simple and doesn't have complicated liabilities. You can start your operation any time you want since no complicated registrations are involved here.
There are absolutely no complications. The owner's PAN card is the business PAN card. So you can file your returns, open your bank account, and carry out any business operation with your PAN card.
You don't have to mainly wind up your company in case you want to discontinue the business. It is easy to dissolve and hence saves a lot of time and effort.
Since proprietorship is a single-person company, it has a certain number of disadvantages. Hence it is suited for small businesses and unorganized sectors with a limited period of existence. Here are a few disadvantages noted down for you.
This type of registration doesn't provide any liability protection to the owner. You are entirely held responsible for all your issues and losses. If the bank needs to recover any loan, your assets will be taken away in the process.
The ownership of a proprietorship firm is not transferable. So in the event of any issues like the owner's death or unavailability, the business will dissolve.
The life of this type of business is tied to the proprietor. This means the business will cease to exist in case the owner dies.
A proprietor cannot raise funds from an angel investor. The only source of loan is the bank. But banks also have high limitations and restrictions while lending any money.
If you are someone who is single-handedly running and handling business, then this is the registration that you should go for. Key registrations that we provide:
We provide MSME or Udhyog Adhaar in your business's name to prove the proprietorship is registered with the Ministry of Micro, Small and Medium Enterprises
We provide TAN registration from the income tax department where the owner can deduct TDS while making payments.
We provide GST certification for your proprietorship. You will need to file a GST in case your turnover is more than 25 lacs.
We also provide an IEC code in case you are selling outside India.
If you are running any food business, we provide you with the FSSAi certification.
This is optional. We can get this done for you if you want. You can also get it done from your end from your nearest bank.
Any Indian resident can start with a proprietorship business in India. You need to have your PAN card and shop establishment license, and you are good to go.
It usually takes ten days from the date of application to register a private limited firm. However, any discrepancy in documents can prolong the process. So make sure you submit every document correctly.
Proprietorship firm registration is highly cost-effective since it doesn't require any complicated registration process. However, it does depend on the type of product that you are selling. To get your customized quote, you can write to us at [email protected] or call us at +919321930979.
As a proprietor, you can run small grocery stores to fast-food centres. You can also run small clothing and manufacturing businesses.
A proprietorship cannot be transferred to another individual. Only the assets in the proprietorship can be transferred to another person through the sale.
Since this is an individual owned entity, so you cannot have any shareholders or investors.
There is no minimum or maximum capital. You can invest as per your capacity.
Since there is no government registration, there will be no incorporation certificate. However, you will have to get a shop establishment license to run a proprietorship business.
It is not mandatory for proprietorships to prepare audit statements each year. However, a tax audit may be necessary based on turnover and other criteria.
