Proprietorship Company/Firm Registration in Varanasi

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What is a Sole Proprietorship Registration?

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.

Who is a Proprietor?

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.

Who is a proprietor?

How Much Does It Cost To Register A Company in Varanasi?

What is a proprietorship?

What is a Proprietorship?

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.

Proprietorship Firm Registration Process in Varanasi

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.

  • 1

    MSME registration

    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.

  • 2

    TAN registration

    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.

  • 3

    GST registration

    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.

  • 4

    Import Export code

    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.

  • 5

    FSSAI registration

    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.

  • 6

    Current account

    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.

Benefits of Proprietorship Formation

Advantages

Advantages

  • Ease of setup- The entrepreneur can start operations and receive payments from clients as no registrations are required to start a proprietorship.
  • Ease of compliance- The other advantage of a Proprietorship is that it requires no additional compliance in most cases. The PAN of the proprietor and proprietorship are one and the same. Hence in most cases, only income tax return in Form ITR-3 must be filed every year.
  • Ease of dissolution- The proprietor does not have to particularly wind up the company incase he wants to cease operations. This saves a lot of time and effort.

Documents Required For Proprietorship Registration In Varanasi

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.

First Sole Proprietorship Proof (Any one of the following documents)

  • Any certificate issued for registration/operations/Trade License/business by Local/ State/ Central Government/ Government Agency/ SEBI/ IRDA/ ICAI/ ICSI/ ICWAI/ Office of Registrar of Newspapers for India in the name of entity/firm. Eg: Sales Tax, TIN/ TAN etc.
  • APMC/ Mandi License/ Certificate
  • Labour License/Certificate
  • Professional Tax Registration Certificate
  • Trade Mark Registration Certificate
  • Liquor License/ Registration Certificate
  • Drug License
  • Registration Certificate issued by Excise & Customs Department.
  • License/ Certificate to Sell/ Stock/ Exhibit for Sale or Distribute Insecticide/Pesticide
  • Registration Certificate issued under Weight & Measurement Act
  • Police Department Permission/License/Certificate
  • Regional Transport Office Permit/Registration Certificate
  • Consent to Operate document issued by State/Central Pollution Control Board
  • Sales Tax Registration Certificate/ TIN Certificate/ GST Registration Certificate/ TAN certificate.
  • Valid Shops & Establishment Certificate/ Trade License. Validity can be extended up to the grace period for renewal as mentioned in such certificate.
  • Certificate Issued by SEZ, STP, EHTP, DTA and EPZ in the name of the entity mentioning the address allotted.
  • Importer–Exporter Code Certificate along with PAN Card (if PAN is quoted on the IEC Certificate).
  • Gram Panchayat Certificate (should be on letterhead and not more than 3 months old).
  • Trade License in the name of the entity.
  • District Industries Center (DIC)/ Small Scale Industries (SSI) Certificate – Acknowledgment Part -II issued by DIC/ SSI containing Entrepreneur’s Memorandum Number. Duly stamped and signed by issuing authority.
  • Factory Registration Certificate in the name of the entity.
  • SEBI Registration Certificate in the name of the entity.
  • Certificate of enlistment/license/shop allotment letter issued by Municipal Corporation (Kolkatta, Ludhiana and others).
  • Shops & Establishment Certificate issued by E-Seva Kendra’s (Andhra Pradesh). Receipt issued only by Municipal Corporation of Hyderabad (MCH) to be accepted along with Shops & Establishment Certificate.
  • The Shops and Establishment Certificate issued by the Municipal Corporations in West Bengal are valid till March 31 every year.

Get Your Proprietor Business Registered in Varanasi With Our Partners

Sole Proprietorship Registration FAQ's

General Questions (7)

How many are required to start a proprietorship?

Only one person is required to start a proprietorship as it can have only one promoter.

What are the requirements to be a proprietor?

Will my proprietorship firm have a separate legal identity?

How can I transfer my proprietorship?

Can other people invest in a proprietorship?

Can I later convert my proprietorship into a company or LLP?

What is the capital required to start a proprietorship?

Registration Process (7)

What are the documents required to start a proprietorship?

PAN of the proprietor along with the identity and address proof is sufficient to start a proprietorship and obtain other registrations, as applicable or required.

How will IndiaFilings help me start a proprietorship?

How do I open a bank account for a proprietorship?

Will my firm have a registration certificate?

How to register the name of a proprietorship?

What are the annual compliance requirements?

Is audit required for a proprietorship?

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  • Premium LEDGERS Accounting Software with GST Portal Integration and eWay Bill Software.
  • Business Current Account and Payment Gateway powered by ICICI Bank Limited. Subject to terms and conditions of ICICI Bank Limited.

Disadvantages

  • Liability protection: A sole proprietorship does not provide the proprietor with limited liability protection. So the proprietor would be held personally liable in case of any loss or liability.
  • Transferability: Any license or registration obtained in the name of the proprietorship cannot be transferred to any other person or entity.
  • Lifespan: The existence of the sole proprietorship is tied to the proprietor hence it would cease to exist with the proprietor.
  • Fundraising: A proprietorship cannot raise equity funds from angel investors, venture capital firms or PE funds. Banks also tend to restrictions on the amount of credit they can lend.

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.

Disadvantages

9 Articles to Read Before Proprietorship Registration

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