A sole proprietorship is a type of unregistered business entity that is owned, managed and controlled by one person. Sole proprietorship is the most common type of business in India and it is used by most micro and small businesses operating in the unorganised sectors.
Proprietorships are simple to start and have minimal regulatory compliance requirements for operating. This entity is ideal for entrepreneurs who are getting into business for the first time and for small businesses with few clients.
The owner of a sole proprietorship business in India is called a proprietor. It cannot be a corporate or legal entity. The proprietor and the proprietorship are considered to be the same entity legally.
The PAN and other documents of the proprietor are the basis for obtaining all other business registrations and licenses. In case of any issues of liability in the business, the proprietor is held personally liable for it.
Proprietorship Definition: A sole proprietorship is a type of unregistered business entity that is owned, managed and controlled by one person.
Sole proprietorship is the most common type of business in India and it is used by most micro and small businesses operating in the unorganized sectors.
Proprietorship are simple to start and have minimal regulatory compliance requirements for operating.
This entity is ideal for entrepreneurs who are getting into business for the first time and for small businesses with few clients.
Each proprietorship differs in terms of the functions, clientele and the mode of operations. Hence, a couple of the registrations mentioned below will be applicable.
MSME or Udyog Aadhaar registration can be obtained in the name of the business to establish that the sole proprietorship is registered with the Ministry of Micro, Small and Medium Enterprises.
TAN registration must be obtained for the proprietor from the income tax department if the proprietor is making salary payments wherein TDS deduction is required.
GST registration must be obtained if the proprietor is selling goods or services that cross the GST turnover threshold limit for registration. In most states, GST registration is required for service providers having annual revenue of more than Rs.20 lakhs and in case of traders - annual revenue of more than Rs.40 lakhs.
Import Export Code or IE code can be obtained from the DGFT in the name of the business - in case of a proprietorship business undertaking export and/or import of goods into India.
In case the proprietorship is involved in the selling of food products or handling of food products, FSSAI registration must be obtained from the Food Safety and Standard Authority of India in the name of the proprietor.
A current account can be opened for a sole proprietorship through IndiaFilings from various banks in India. IndiaFilings offers exclusive partnerships through which zero-balance current accounts can be opened. It is recommended that GST registration be obtained for the same.
Document Required for Opening Proprietorship Bank Account
Based on the above RBI guidelines, various banks have enacted procedures and list of documents required for opening a current account in the name of a Sole Proprietorship firm. The following is a Bank’s list of documents required for opening Proprietorship Bank Account.
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Due to the disadvantages mentioned above, this registration will be suitable only for small businesses and the unorganised sector with a limited period of existence.
Procedure and documents requried for starting a proprietorship in India. A sole proprietorship is one of the most common form of business in India. Any Indian citizen can easily start a proprietorship.
Sole proprietorship is the most widespread form of business ownership in the world. As the name suggests, it is a kind of business in which a single person is vested with the ownership of the assets and affairs of the business. In this article, we look at the advantages and disadvantages of a proprietorship firm.
Procedure for opening sole proprietorship bank account. The Reserve Bank of India has laid out Know Your Customer (KYC) norms for opening of current account in the name of a sole proprietorship along with the list of documents required.
Under Income Tax Act, all proprietors below the age of 60 years are required to file income tax return if total income exceeds Rs. 2.5 lakhs. The income tax rate for proprietorship is slab based starting from 10% for income between Rs.2.5 lakhs to Rs.5 lakhs.
File income tax return of proprietorship firm online with Expert help. Proprietorship firms are required to file tax return each financial year if taxable income exceed Rs.2.5 lakhs. IndiaFilings provides accounting and tax return filing services to help proprietorships file tax returns.
GST registration procedure, eligibility and documents required. Entities with an annual revenue of more than Rs.20 lakhs must obtain GST registration. Complete your GST registration online with expert help from IndiaFilings and obtain your GSTIN in less than a week from the comfort of your home.
File GST return online through IndiaFilings with GST Expert Support. You can prepare and file GSTR-1, GSTR-2, GSTR-3 and GSTR-4 return online through IndiaFilings. In addition to filing GST returns, you can also issue GST invoices and record purchases on LEDGERS to automatically file GST returns.
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