TAXAJ

Sole Proprietorship Firm Registration

When a single person runs a business, such a Business is called a proprietary Business, and the company owner is named proprietor. A proprietorship is a common form of Business in India. You can start and operate the Business with minimum regulatory compliance. However, there is no complete-fledged way available to register your proprietorship by the Indian Government. Tax registration and other business registration is the right way to show your proprietary Business's existence. Following registrations can be used to indicate the presence of your proprietary Business


→ Professional Tax Registration. 

→ GST Registration. 

→ Shop and Establishment Registration. 


The owner of a sole proprietorship business typically signs contracts in their name because the sole proprietorship business has no separate identity under the law. The sole proprietor owner will generally have customers write checks in the owner's name, even if the company uses a fictitious name. Sole proprietor owners can mix personal and business property and funds, something that partnershipsLLP's, and Private Limited Companies cannot do. Sole proprietorships often have their bank accounts in the name of the owner. Sole proprietorships can bring lawsuits (and can be sued) using the name of the sole proprietor owner.

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About This Plan

TAXAJ will register your proprietorship firm in a quick and cost effective manner

Created by potrace 1.15, written by Peter Selinger 2001-2017

Timeline

It usually takes 3 to 5 working days.

Buy Now
Services Covered
Who Should Buy
How It's Done
Documents Required
Services Covered

  • Session with TAXAJ Expert
  • PAN Application (if proprietor PAN not available)
  • Registration under Shop & Establishment Act and GST Act
  • Advisory on other applicable government registrations
Who Should Buy
  • Service providers providing services online or offline to clients
  • Businesses manufacturing goods
  • Traders and merchants selling goods
How It's Done

    • Purchase of Plan
    • Session with TAXAJ Expert
    • Upload Documents on Vault
    • Filing of application
    • Receipt of Registration Certificate
Documents Required

  1. Name, Contact Number and Email Id of Stakeholder.

  2. Self Attested PAN, Aadhar & Passport size photo of Stakeholder.

  3. Specimen Signatures of Stakeholder.

  4. Latest Electricity Bill/Landline Bill of Registered Office.

  5. NOC from owner of registered office. (If Owned)

  6. Rent Agreement from Landlord. (If Rented/Leased)

  7. Brief description of main business activities of the proposed Company.

Features of Proprietorship Firm

One Man Ownership

In a proprietorship, only one man is the owner of the enterprise.

No Separate Business Entity

No distinction is made between the business concern and the proprietor. Both are the same.

So Separation between Ownership and Management

In a proprietorship, management rests with the proprietor himself/herself. The proprietor is a manager also.

Unlimited Liability

Unlimited liability means that In case the enterprise incurs losses, the private property of the proprietor can also be utilized for meeting the business obligations to outside parties.

All Profits or Losses to the Proprietor

Being the sole owner of the enterprise, the proprietor enjoys all the profits earned and bean the full burnt of all losses incurred by the enterprise.

Fewer Formalities

A proprietorship business can be started- without completing many legal formalities. There are some businesses that, too, can be started simply after ‘obtaining necessary manufacturing license and permits.

Characteristics of Sole Proprietorship – How does it Looks Like!

Single Ownership

A single individual always owns a sole proprietorship form of business organization. That individual owns all assets and properties of the business. Consequently, he alone bears all the risks of the business.

Thus, the business of the sole proprietor comes to an end at the will of the owner or upon his death.

No Sharing of Profit and Loss

The entire profit arising out of sole proprietorship business goes to the sole proprietor. If there is any loss, it is also to be borne by the sole proprietor alone.

Nobody else shares the profit and loss of the business with the sole proprietor.

One man’s capital

The capital required by a sole proprietorship form of business organization is arranged by the sole proprietor.

He provides it either from his resources or by borrowing from friends, relatives, banks, or other financial institutions.

One-man Control

The controlling power in a sole proprietorship business always remains with the owner.

The owner or proprietor alone takes all the decisions to run the business. Of course, he is free to consult anybody as per his liking.

Unlimited Liability

The liability of the sole proprietor is unlimited.

This implies that in case of loss, the business assets, along with the personal properties of the proprietor, shall be used to pay the business liabilities.

Less Legal Formalities

The formation and operation of a sole proprietorship form of the business organization require almost no legal formalities. It also does not require to be registered. However, for the business and depending on the nature of the business, the sole proprietorship has to have a seal.

He may be required to obtain a license from the local administration or the health department of the government, whenever necessary.

Frequently Asked Questions:

Q. What is a Proprietorship?

A proprietorship/sole trading firm is a business that is owned and run by an individual person. The owner and the business are treated one and same. Proprietor is personally liable for all business debts i.e his personal property may also be used to repay business debts.

Proprietorships are not regulated by any particular Act, hence there is no registration. Every business needs registration under Shop & Establishment Act whether it is providing a service or dealing in goods. Other registrations such as GST etc depend upon nature of product/service.

Q. What are the government fees applicable for registration under Shop and Establishment Act?

These are the government fees applicable for registration under Shop and Establishment Act. These depend on the state and the number of employees.

Andhra Pradesh

0 Employees: Rs. 30; 

1 to 5 employees: Rs. 100; 

6 to 10 employees: Rs. 200; 

11 to 20 employees: Rs. 1000

Delhi

0 Employees: Rs. 5; 

1 to 10 employees: Rs. 15; 

10 to 25 employees: Rs. 30; 

25 and above employees: Rs. 50

Madhya Pradesh

0 Employees: Rs.100 

1 to 3 employees: Rs.150; 

3 to 10 employees: Rs. 200; 

More than 10 employees: Rs. 250

Maharashtra

0 employees: Rs. 100; 

1 to 5 employees: Rs. 300; 

6 to 10 employees: Rs. 600; 

11 to 20 employees: Rs. 1000; 

21 to 50 employees : Rs. 2000; 

51 to 100 employees : Rs.3500; 

101 or more employees: Rs. 4500

Q. I need to get my business registered in multiple locations within Maharashtra. Do I need to apply separately?

If you have multiple places of businesses in same state, you can get them all registered under a single GST registration application. Give the name of your registered business place as primary place of business, the other branches can be added as additional places of business at no additional cost. There is no limit on number of branches that you can add under a single GST registration application, provided all the branches are in same State.

Q. I am a sole trader. Do I need TAN registration?

TAN is Tax Deduction and Collection number which is needed if you are responsible for deducting tax at source on behalf of Income Tax Department. It is also quoted in various challans, returns etc. Not every proprietor is required to get a TAN unless it is required due to the nature of his business or profession. ClearTax expert will advise you if you need to obtain TAN.

Q. Is there any guideline on choosing Proprietorship firm's name?

The name of the firm should not contain any words which indicate the approval/support of the government unless the government has given its written consent for the use of such words as part of the firm’s name. The name of the firm can be reserved by getting trade mark registration.

Q. What is the objective of the Shops & Establishments Act?

Every Indian state has enacted certain rules and regulations with regard to conditions of work. The objective is to secure uniform benefits for employees working in different establishments, from shops, commercial establishments and residential hotels to restaurants, theatres and other places of public amusement or entertainment.

Q. When is a Shops and Establishments Act license required?

Every shop and establishment needs to register itself compulsorily under this Act within 30 days of commencement of work. As this is such a basic license, many other licenses require this as proof of a commercial business. For example, most banks will require you to furnish it if you want to open a current account.

Q. What are the records to be maintained under the Shops and Establishment Act?

Under the Shop and Establishment Act, every business has to seek approval from Department of Labour and keep up-to-date registers regarding details of employment, fines, deductions and advances, salary and holidays. The requirements may vary from state to state. Files related to annual holidays and number of employees need to be submitted to the office of the Municipal Corporation annually.

Q. What is GST and GSTIN?

Goods and Services Tax(GST) is a comprehensive tax levied on manufacture, trade and services across India. From 1st July, 2017 GST has replaced most of Centre and State imposed indirect taxes like VAT, Service Tax , Excise etc. Goods and Services Tax Identification Number (GSTIN) is a 15 digits state-wise PAN-based number to be used to identify businesses registered under GST.