Sole Proprietorship Firm
Start your small business in a simple yet structured way. EOB helps you register your business as a Sole Proprietorship.
Fee: ₹ 1999 /- (All Incl).
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Proprietorship Firm Registration
Any person starting a business with complete ownership of the business is a sole proprietor. And the business entity is called a Sole Proprietorship Firm. By forming this entity, the owner creates a distinct identity for the business.
However, for all legal purposes the identity of the individual and the business are not different from each other.
Having partners may not always be necessary. Besides, having a partner dilutes the control over operations. A sole proprietorship is typically used by individuals who are starting small or specialise in a particular trade, art, skill or service.
Its commonly used by bakers, food outlets, shops, service centres or any standalone business entity where the owner drives the business and the execution.
There is no specific act to regulate this structure. It benefits millions of small businesses who opt for this due to lower risks and wish to start small. Register your Sole Proprietorship Firm today and kick start your idea into reality.
ADVANTAGES
Benefits of a Sole Proprietorship Firm
The paperwork is minimal and you can start your firm within a week. This makes it the quickest way to start your business with minimum compliance.
A Sole Proprietorship firm is owned and operated by one person, the owner. This gives the individual complete authority over decision making and running the business.
In case of a Sole Proprietorship firm the PAN card for the business is the same as the owner’s PAN Card, so no additional compliance is needed.
You can start the business by opening a bank account and getting a GST registration done by choosing your place of work (which could even be your home).
A proprietorship firm has no mandatory investment requirements. You can start with a minimum amount making it easy to start and operate.
Winding up the business is also simpler compared to other forms of business registrations. A minimal set of procedures are needed to dissolve the business.
How to choose a name?
A proprietorship can be recognised with the individual’s name, but a business name is preferable as it helps in building the brand of the business.
Unique Name
Check for a unique sole proprietorship name that helps in recognising the proprietorship firm distinctly and building brand value.
Business Objective
A part of the business name should suggest the business activity so that consumers can easily relate the business with its offerings.
Short and Simple
The name should not be unnecessarily long and should be simple enough to spell and remember.
THE PROCEDURE
It’s a simple process to register your proprietorship online.
- Collect the basic information
- Discuss the requirements
- Prepare online application for GST
- Prepare online application for TAN
- Open bank account
- Ship Firm seal and other basic necessities
FREQUENTLY ASKED QUESTIONS
Explore Sole Proprietorship Firm – Its formation and registration
Does the proprietor have to be an Indian to start a proprietorship firm?
If the proprietor is an Indian citizen and a resident of India, there is no approval required prior to the commencement of business.
Non-Resident Indians (NRI) and Persons of Indian Origin (PIO) can invest in or start a sole proprietorship business only with prior approval from the Government of India.
Under which government authority is the application of Sole Proprietorship Firm registration submitted?
A Sole Proprietorship is an unorganised business structure and there is no specific law enforced for the said registration. EOB provides services for Sole Proprietorship registration under MSME (Micro, Small and Medium Establishments) Development Act, 2006 of Central Government. The business entity must fulfil the registration requirements.
What is the minimum amount of capital required to register a sole proprietorship online?
One can start a Sole Proprietorship firm with any amount of capital. An amount sufficient to commence the business should be introduced. As there is no restriction on infusion or withdrawal of amount, the proprietor can change the capital anytime. Introducing the capital into the business is the sole decision of the owner of the firm i.e. the Proprietor.
How to open a bank account for a Sole Proprietorship?
To open the bank account in the name of the Sole Proprietorship Firm, Reserve Bank of India mandates that the proprietor needs to provide two forms of registration for the proprietorship along with the PAN Card, identity proof and address proof of the proprietor.
The two forms of registration can be any two of the following:
- MSME registration
- GST registration
- Registration under Shop & Establishment Act
- Professional license
- Chartered Accountant certificate
- Other accepted documentation as provided in the RBI’s Know Your Customer (KYC) norms
- The requirements of the respective bank
How to register the name of a Sole Proprietorship firm?
There is no registry or regulation for registering the name of a Sole Proprietorship firm. Therefore, the name of a sole proprietorship company can adopt any name based on its availability such that it does not infringe on registered trademarks. Since there is no registry or regulation for registering the name of a proprietorship, the only way to ensure the exclusive use of the business name is to obtain a Trademark Registration of a business name.
Will my Sole Proprietorship firm have a separate legal identity or new PAN card after registration?
There is no separate identity of a proprietor and the business even after the sole proprietorship firm is registered. Hence, the PAN card of the firm and the proprietor is the same. The assets and liabilities for the proprietor and the proprietorship also remain the same.
What are the benefits of Proprietorship Firm Registration under MSMED Act?
The registered entity under MSMED Act can avail subsidies, incentives, and schemes launched by the Central Government with respect to the specific business on the basis of a registration certificate.
Who can apply for registration under the MSMED Act?
Any business entity can apply for this registration. However, recently, the Central Government has excluded the activities of trading to be registered under this Act. A business with trading activities can apply for registration under the Shops & Establishments Act.
Can I have partners in a Sole Proprietorship Business?
The characteristic of a Sole Proprietorship firm is such that it cannot have any other business partner as it is owned and controlled by one person itself. If your business requires the involvement of partners, you may opt for a Partnership Firm, Private Limited Company, or Limited Liability Partnership, as the case may be.
Can other people invest in a Sole Proprietorship?
A Sole Proprietorship business entity is owned, managed and controlled by one person. So, a proprietorship firm cannot issue shares nor have investors.
What are the compliance requirements for a Sole Proprietorship firm in India?
A Sole Proprietorship firm must file its annual tax return with the Income Tax Department. Other tax filings such as GST returns filing may also be necessary from time to time, based on the business activities performed and registrations opted.
Can I later convert my Proprietorship Business into a Company or LLP?
A proprietorship can be taken over by the company or LLP. However, the procedures for the same are cumbersome, expensive and time-consuming. Therefore, it is wise for many entrepreneurs to consider starting a Company or LLP instead of a Sole Proprietorship after consultation with experts.
What is included in the legal documents library?
Documents such as employment letter, legal notice, non-disclosure agreement, Terms of Service, Privacy Policy and many more are a part of the legal documents library.
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