Starting a Proprietorship Firm is easy, simple, and cost-effective. Our packages offer free consultation, GST Registration, and Udyam Enrolment (MSME) to set up a proprietorship firm. The proprietorship is the simplest form of business. Talk to our start-up advisors to get started.
| Details | Description |
|---|---|
| Timeline | Starts Instantly |
| Cost | It varies from state to state, as well as the nature of the business. |
| For Indians | Natural persons who are Indian Citizens can start a Proprietorship. |
| For NRI/OCI | NRI & OCI can establish a proprietorship on a non-repatriation basis. |
| For Foreigner | Foreigners need help to start a proprietorship in India. |
| Stepwise Process |
|
A sole proprietorship is a single-owner business and is the simplest in which the sole owner infuses all its capital and, therefore, is entitled to all of its profits and losses. The proprietorship firm and the proprietor are one and the same thing. There is no distinction between ownership and management. There is a requirement for incorporation or registration of the sole proprietorship as such. However, certain common registrations such as GST, MSME, etc, are generally obtained for the firm.
As mentioned earlier, there is no need for registration or incorporation for a proprietorship firm. However, to conduct the proprietorship business, certain basic registrations, such as GST, MSME, or IEC, may be obtained. The following list of required documents is crucial for these registrations.
The Proprietorship Registration process in India is the easiest and simplest among all business structures. There is no requirement for a formal incorporation. You can start your business immediately after you have fulfilled all the minimum requirements mentioned above. However, you must take specific mandatory registrations to establish your firm’s legal existence after beginning business operations. Navigate the steps below to complete the Sole Proprietorship Registration process in India.
Documentation for starting proprietorship
To start a proprietorship business, you should arrange the primary KYC documents for the proprietor, the business's sole owner. Proof of the proprietor's Aadhar, Pan, and residential address would be needed in the process. Every business in India must declare one address as its Principal Place of Business, for which proof of the premises, such as a utility bill and NOC from the owner of such premises, must be obtained.
Select a Unique Name for the Business
The next step is to select a unique name for your Sole Proprietorship Firm. The name must be legally valid and available for use. Also, the chosen name must not infringe the trademark of some other business. As a best practice, you should register the business name as your adopted trademark. We can help you register the business name, domain name, brands, and logo as a Trademark.
Take MSME / Udyam Registration
Sole Proprietorships are usually small-scale local businesses that qualify as MSMEs. You can obtain the MSME registration for your proprietorship business and avail numerous benefits. These include collateral-free loans, interest subvention on loans, timely buyer payments, and 50% rebates on IPR registration. Moreover, an MSME registration certificate is crucial for opening a business bank account. We provide MSME Registration to Proprietorship Firms throughout India.
Proprietorship GST Registration
Eligible Sole Proprietorship Firms must register for GST to fulfil all GST-related compliances. The applicant firm can submit the application and all GST registration documents required for a sole Proprietorship firm on the GST portal. When the GST department approves the application, a GSTIN is allotted to the firm. This GSTIN can be used for all future GST-related activities.
Get Shops & Establishment Act Registration
Except for manufacturing businesses, all businesses are mandatorily required to get the Shops & Establishment Registration. This includes Sole Proprietorship firms as well. The registration is obtained from the State’s Labour Department, for which either an online or offline application is filed. The application must be accompanied by all the documents listed above.
Industry-specific Registrations
To open a bank account for the sole proprietorship firm, you must contact any national bank. They would insist on two documents with the name of the sole proprietorship firm and address. Where one document is taken as proof of entity, the other is the address proof. These requirements are part of the KYC requirements prescribed by the RBI.
The government fees include the registration fee charged by the Registrar of Companies for Pvt Limited company registration, stamp duty levied by the concerned state government (which may differ from state to state), and the cost of making the DSC. By partnering with Setindiabiz, you can ensure a smooth process and minimise associated costs.
The RBI regulations regulate the banks and must adhere to the KYC-related requirements as prescribed from time to time. We can help you arrange the necessary registration, as discussed above.
A sole proprietorship firm is the simplest form of business owned and controlled by a single individual. The owner of the proprietorship firm is known as the proprietor. The proprietor alone invests the entire capital and is thus entitled to all the sole proprietorship’s income. The liability of a sole proprietor is personal and unlimited. This indicates that the proprietor is liable to pay off all liabilities from his pocket if such a need arises.
Any person who is over 18 years, capable of entering into a lawful contract is eligible to start a proprietorship. The option to create a proprietorship is available to Indian Citizens only. However, NRIs and OCIs are permitted to establish proprietorship firms and invest only on a non-repatriation basis.
A proprietorship business can be started with any amount of capital, as there is no prescribed limit for it. The proprietor must infuse the capital into the proprietorship based on the nature and scale of its business activities. He can introduce or withdraw capital at any time from the accounts of the proprietorship business as drawings.
The Reserve Bank of India regulates the opening of bank accounts of proprietorship businesses. It has prescribed the submission of at least two proofs of identity of the proprietorship in order to open its bank account. To open a bank account for the business, you can approach any bank near you. Submit the prescribed application form along with the necessary supporting documents. Please click here to read our article on the list of required documents for the proprietorship firms’ opening bank accounts.
Yes, proprietorship businesses can be converted to LLPs or Private Limited Companies. However, the conversion process is complicated, and we do not recommend it unless it is necessary.
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