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The Proprietorship firm in India are a type of business entity that is owned, controlled, managed by one person. The micro, small and medium enterprise owners prefer to get registered as Proprietorship Firm in India. The proprietor has the responsibility for all assets and liabilities of the Proprietorship Firm.
Any Indian citizen can get a Proprietorship Firm registration, having a current bank account in sole name or name of the business to take the business forward and operate. The Proprietor should apply for GST Registration on the GST Portal, MSME Registration on the Udyam Portal and obtain Shop & Establishment Registration. In case of Proprietorship Firm, the PAN of Proprietor and Firm are the same.
Under the Companies Act, 2013; MCA have introduced One Person Company Registration to give window to solopreneurs to register a Private Limited Company without needing to dilute his/ her shares. It means 100% shareholding will vest with only one person and that is why it is popularly known as One Person Company (OPC).
To be on the safer side, it is advisable to file Trademark Application to save your brand name/ logo. Trademark once registered is valid for 10 years and available for renewal.
Advantages and Disadvantages of Proprietorship Firm Registration
Easy Decision making
Unorganised business category
The below are the documents required for a Proprietorship Firm registration in India to run a business.
In addition to the above, there may be additional registrations and license required depending upon the state, industry and local regulations.
The Proprietorship Firm registration usually takes 2 weeks; however, it would again be dependent on various factors like the processing timelines on part of bank and government procedures.
Registering a Proprietorship Firm Online
To begin with the registration, the PAN and Aadhar of the owner is essential.
GST Registration – The Proprietor must obtain the GST registration through the GST portal where the turnover is more than 20 lakhs and to run an online business and the below documents are required:
Opening a Bank Account – The Bank account should be in the name of business owner using the owner’s PAN and submitting the below:
Shop & Establishment Act – The process to avail the Shop & Establishment Act license for Proprietorship Firm would vary from state to state and is usually obtained within 2–3-week time period.
The following compliances should be adhered as applicable to Proprietorship Firm where the turnover is more than INR 2.5 Lakhs for IT return.
The Proprietor can undertake any business activity depending on the industries and sectors. Though per the law, there are certain listed activities which requires special approval from Government such as insurance, banking functions, lending, telecommunications, defence. It is advisable to seek the advice of a professional consultant or legal expert to understand the compliance requirements and ensure that the business operates in compliance with local laws and regulations.