Sole Proprietorships can be started in India by an Indian Citizen. The Sole Proprietorship is a owned by a single person and it is simplest & unregistered form of business. Proprietors invest entire capital in business and entitled for full profit or loss.
No registration is required with Registrar Of Companies but registration required with Goods & Services Tax (GST) and also obtaining TAN number for complying with the Indirect Tax and provisions of the Income Tax Act. The business owner can start taking payments from customers and issue invoices without having to worry about any registration .
Most Bankers insist for two KYC documents in the name of the firm to open a Current Bank Account in the name of Proprietorship Firm. It does not offer the Proprietor a host of benefits such as separate legal entity, limited liability proprietorship, corporate status, transferability, perpetual existence - which are desirable features for any business.
Â A Proprietor can commence his business immediately because there is no any registration required.
The PAN of the Proprietor and Proprietorship are one and the same. Hence, for a Sole Proprietorship with minimal business revenue - only income tax return in Business ITR Form must be filed every year.
In case of discontinuous of business the proprietor can surrender his business no compliances are required,OnlyÂ the proprietor need to deactivate the PAN & TAN and all other licenses generate on the name of business.
The foreign Investment (FDI) is not permissible in a proprietorship, However an NRI can invest in proprietorship firm provided the profits are not repatriated out of India.
The documentation of the proprietor and the place of business where the business of the firm shall be carried on, ensure that the documents are updated and correct.
select a unique name of your proprietorship business and the starting point should be to search the proposed name of the business in trademark register to avoid any infringement on someone else's business or trademark.
There is need of two documents for the opening of bank account in the name of the proprietorship, one of the registrations could be Udyog Aadhar which enables an entrepreneur to seek online services offered by Government Departments apart from various other benefits under MSME Act.
GST is the main source of selling and purchasing of Goods & Services. You may not be able to supply goods or services all over India unless GST Registration is obtained, however for same state supply the limit is 40 Lac/20 Lacs. This also serves as a second document issued for the proprietorship, which shall be required by banks while opening a bank account in the name of the firm.
|No Registration required with ROC.||Registration required with ROC.|
|No separate legal entity.||Separate legal entity.|
|No annual filling required with ROC.||Annual filling required with ROC.|
|Small in size.||Large in size.|
|Unlimited liabilities.||Limited liabilities.|
|No Perpetual Existence||Perpetual Existence|
There is no provision in the law which prescribe any minimum capital for the Proprietorship firm. The capital must be infused by the proprietor based on the nature and scale of the proposed business. You shall have the ability to introduce or withdraw capital at any time from the accounts of the proprietorship business as drawings.
No, It owned and controlled by a sole person. There is no requirement to engage any other person to start a proprietorship business.
Reserve Bank of India, have prescribed submission at least two entity proof for the proprietorship. To open a bank account, you may approach any bank nearest to you, and generally, they need following documents.
For the registration of MSME document required mentioned below