How to Register a Proprietorship Firm

What is Sole Proprietorship Firm?

A proprietorship Firm is a easiest form of business entity in India. You may ask why it is easy to form. Its simply because there is no Government regulation to form a Proprietorship Firm as compared with a Private Limited Company or Partnership Firm. Sole Proprietorship is nothing but Single Ownership. Only one person controls the entire business. The Proprietor and the Proprietorship Firm are both considered as one single entity.

Features of Sole Proprietorship Firm:

1. Single owner controls the entire business

2. No much legal compliances.

3. Unlimited Liability on Proprietor

4. Both the Proprietor and the Firm are considered as a single entity

Difference between Proprietorship Firm, Partnership and Private Limited:

SN	Field	Proprietorship	Partnership	Private Limited Company
01	Ownership	Single Owner	Partners are owners	Share holders are owners of the Company
02	Managed by	Owner himself	Partners manages the business activity
03	Governing Act	No Specific Act	Partnership Act, 1932	The Companies Act, 2013
04	Liability	Proprietor is personally Liable all the Liabilities	Partners are individually as well as collectively responsible for all the losses	Liability of Directors and Members are Limited to their shares.
05	Registration	No specific formality	Registration is optional as per the Indian Partnership Act, 1932	ROC Registration is compulsory
06	Maximum members	Only One	Unlimited	Maximum of 200 members

 

Benefits of Sole Proprietorship Firm

1. Decision making: The most primary advantage of a Proprietorship firm is that the easy decision making. As the single proprietors is the controlling authority of a business, there is no need for obtaining any approval from any BOD or partners.

2. Easy to form: As there is no legal requirement to form a Proprietorship, it is easy to get established. Even there is no big money is required to form a company

3. No restriction on Capital: The law doesn't insist on any minimum capital or not even restricts on maximum capital. So the proprietors can start his business with any capital that requires or suits his business.

4. Tax benefits: Unlike Private Limited or Partnership it is not flat 30% income tax to be paid. There is a slab. which he had mentioned in detailed below. 

Taxation for Proprietorship Firm

Taxable income	Tax Rate
Up to Rs. 2,50,000	Nil
Rs. 2,50,000 to Rs. 5,00,000	10%
Rs. 5,00,000 to Rs. 10,00,000	20%
Above Rs. 10,00,000	30%

Is it need to have a separate PAN Card for Proprietorship Firm?

As the proprietor and the firm are considered as single entity, The proprietorship firm cannot obtain a separate PAN Card.

Field Specific Mandatory Registrations

Is there any mandatory requirement to run a business? Yes each business requires field specific registration. Eg. If it is Hotel, he need to obtain FSSAI, Corporation Licence, and GST (or) if it is a Garments Industry, it need to obtain Pollution Control License. 

Apart from that there are some conman licenses and Registrations

GST Registration: Goods and Service Tax Registration is mandatory if you are supplying Goods/Service within India. The basic exemption limit is Rs.20 Lakh. It will take minimum 3 to 4 days to obtain a GST Certification.

Required Document

PAN Card,

Aadhar Card,

Passport size Photo,

Rental deed,

EB Card,

Cancelled Cheque.

MSME: Micro Small Medium  Entrepreneurs also called as Udyog Aadhar registration.  As small scale industries are the back bone of the Country, Government is providing various schemes to the small and medium scale industries through MSME. The MSME registration is issued by the State Government and now from 2015 it is changed as Udyog Aadhar.

Micro Industry is which does not exceed Rupees 25 Lakhs of Capital

Small Scale Industry is which does not exceed Rupees 5 Crores.

Medium Scale Industry is which the capital does not exceed 10 Crores

The document that is required for obtaining UdyogAadhar/MSME are that the Proprietor's Aadhar Card and Bank Account details.

Trademark Registration: Trademark Registration protects your Company name, Brand Name and also Logo of any organisation. You would have seen with ™ & ® which represent Pending and Registered Trademarks Respectively. This will act as a proof to fight against Duplications.

A.Arivazhagan

Adovate

http://leintelligensia.com/

Cell: 9941993399