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About Proprietorship Firm

A proprietorship firm means the firm is no different than its proprietor, i.e., the owner. It is not a company and is not necessary to be registered under the Companies Act or Establishment Act.

Advantages of Sole Proprietorship

Less Formalities During Formation.
No Government Intervention.
Less Wastage Of Time For Taking Various Approvals.
Limited Capital Required According To Own Wish.
PAN Of The Proprietor And Proprietorship Is Same.
Current Account Can Easily Opened In The Name Of Proprietorship In Case You Have A Registration In Name Of Proprietorship.
The Owner Reports Income/Loss From This Business Along With His Personal Income Tax Return In Form ITR-3 Every Year.
No Sharing Of Profit.

Disadvantages of Sole Proprietorship

Proprietorship Is Not A Separate Legal Entity From Its Proprietor.
Personal Property Of Proprietor Is Also Affected In Case Of Any Loss Arise In Sole Proprietorship.
Difficulty In Transferring Business Ownership Due To Single PAN Usage.
No Perpetual Existence; Ceases With The Death Of The Proprietor.
Difficulty In Obtaining External Funding.
Limited Scope Of Recognition.

How to Register a Sole Proprietorship in India?

There is no specific registration process prescribed by the government for the registration or operation of Sole Proprietorship in India. Any individual can start their business under Sole Proprietorship form by obtaining one or more of the following registrations:

MSME Registration
GST Registration
Trademark Registration (If you want to protect your business name)
Shop and Establishment Licence
FSSAI Registration (For businesses dealing in food)
Import and Export Code (For import/export businesses)
Copyright Registration (For creative works)

Documents Required for Sole Proprietorship Registration

PAN Card of Proprietor.
Aadhaar Card of Proprietor.
Trade Name or Proprietorship Name.
Email ID and Mobile Number for Communication Purpose.
Utility Bill or Rental Agreement with NOC for Address Proof.

Procedure for Obtaining Proprietorship Registration

The process of registering for a Proprietorship in India is completely online. There is no need to submit the documents manually.
An incorporation expert will guide you on the whole process and the required documents.
Once the documents are submitted and payment is initiated, the registration process begins.
A relationship manager is assigned to guide you through every step.
Proprietorship registration in India can be obtained within 8-10 days subject to document submission.

Checklist for Obtaining Sole Proprietorship Registration

A certificate issued by the municipal authorities under the Shop and Establishment Act.
A license issued by registering authorities like the Certificate of Practice issued by the Institute of Chartered Accountants of India.
Registration or licensing document issued in the name of the proprietorship concern by central or state government authority.
Complete tax returns in the name of the sole proprietor, duly authenticated and acknowledged by the Income Tax Authorities.
Utility bills such as electricity, water, and landline telephone bills in the name of the proprietorship concern.
Issue of GST registration or certificate.

Benefits of Registration of Proprietorship Firm

Complete Control: Proprietorship firms are owned and operated by one person, allowing full authority and decision-making.
Easy Setup: No registrations required to start, facilitating easy creation and payments from clients.
Easy Compliance: Minimal additional compliance required in most cases, with income tax returns being the primary requirement.
Dissolution: Ceasing operations is straightforward without significant winding up processes.
Requires Less Investment: Starting a proprietorship in India requires minimal investment, making it accessible to low-fund startups.
Information Privacy: Financial reports of proprietorship firms are not public, maintaining confidentiality.

Proprietorship Firm Registration