Proprietorship Firm Registration
Introduction of Proprietorship Firm Registration
Proprietorship firm registration means a firm which is owned and control by sole member. There is no separate legal entity between the sole proprietor and the business property. Sole member is the only owner of the property who enjoys all the profits and suffers all the losses of the firm. The liability of the sole member is unlimited which means when business profits are not sufficient for set off the losses of the business then the personal property of the sole owner should be used for setting off the losses. In proprietorship firm registration, there is a minimum requirement of regulatory compliance for starting and operating.
Sole member can also delegate its authority to another person as an employee but shall not delegate the singing authority on legal documents of the firm to any other person.
If the sales turnover of the proprietorship firm is exceeding Rs. 1 crore (in case of a business) or if gross receipts of proprietorship are exceeded Rs. 50 lakh (in case of the profession) then tax audit is mandatory.
Features of proprietorship firm :
- One Person required as single entrepreneur.
- Single owner of the business.
- Easy to start and easy to close.
- Complete control.
- Nominal cost of formation and compliances.
Basic Features to Read before starting Proprietorship Firm Registration:
1. Bank Account Opening for Proprietorship
- Procedure for the opening bank account of Proprietorship Firm.
- Documents such as MSME, BRN No., GST Registration Certificate, PAN Card, Aadhar Card, Passport Size Photo, Rent Agreement, Electricity Bill are required for an opening bank account.
- And as per the Reserve Bank of India Know Your Customer (KYC) norms have also complied.
2. Advantages & disadvantages:
- Proprietorship is easy to setup.
- There is no legal entity between a sole proprietorship and business property.
- There is no sharing of profit & loss.
- Freedom of decision making.
- Lower capital is required.
- There is unlimited liability.
- There is difficulty in increasing investment.
3. Proprietorship Firm Registration Setup:
Procedure for the startup of proprietorship firm Registration
Documents required for setting up the proprietorship firm registration are-
- PAN card,
- Name of business,
- Current account in the name of proprietorship in bank,
- Business address proof Bill required,
- The license under Shop Act.
- To start a proprietorship firm it is necessary to register under the Shop Act. You required a location to start a business
Following registered persons not required to file GSTR 1, 2 and 3 such as:
Goods and Services Tax (GST) is an indirect tax applicable on the supply of goods and services. It is a comprehensive, multistage, destination based tax. It has subsumed almost all the indirect taxes except a few state taxes. It is collected from point of consumption and not point of origin like previous taxes.
Documents attach in trademark application:-
A trademark can be registered by the Controller General of Patents Designs and Trademarks, Ministry of Commerce and Industry, Government of India under Trademark Act, 1999 to protect the identity of any goods and services.
Some basic information about Income tax
An income tax is a tax imposed on individuals or entities commonly known as taxpayers that varies with respective income or profits. Income tax generally is computed on taxable income which is calculated after various deductions. Taxation rates may vary by type or characteristics of the taxpayer.
FREQUENTLY ASKED QUESTIONS ON PROPRIETORSHIP FIRM
1. What are the benefits of sole proprietorship?
Ans. Sole proprietorship is easy to setup. Sole proprietorship there is minimum requirement of regulatory compliances as compare to other business. There is no need to file annual report and financial statement with MCA.
2. How many minimum capital required to start a sole proprietor?
Ans. There is no minimum capital required to start a sole proprietorship. An owner can invest according to his requirement.
3. Is audit is required in sole proprietor?
Ans. In proprietorship if sales turnover of proprietorship firm is exceed Rs.1crore (in case of business) or if gross receipts of proprietorship is exceed Rs.50 Lac. (In case of individual) then tax audit is mandatory.
4. Can proprietorship firm convert into partnership firm?
Ans. Yes a proprietorship firm is convert into partnership firm. For conversion proprietorship into partnership firstly we dissolve the proprietorship firm.
5. How many people are required to start a sole proprietor?
Ans. There is only one person required for start a sole proprietor.
6. How sole proprietor firm can dissolve?
Ans. A sole proprietorship is a single person business entity, for dissolving the proprietorship firm firstly you should pay all the debts and maintain records for tax filling purpose.
7. What is annual compliances for sole proprietorship?
Ans. Like other companies which are register under MCA, the sole proprietorship firm are not required to file annual report and financial statement with MCA.
8. Is GST registration is mandatory for sole proprietorship?
Ans. If sole proprietorship has threshold limit than GST registration is mandatory for sole proprietorship.
9. Does sole proprietorship need to be register in India?
Ans. You don’t need to register your sole proprietorship in India. But in order to receive payments in the name of the business, you need to open a current account in bank. For this, you will need proof of existence of the Firm, and the address proof.
1st Year Income tax return Filing
12 Months GST Filing
12 Months TDS return filing
1st Year Income tax return Filing
12 Months GST Filing
1st Year Accounting in Tally ERP 9 (Full Transactions)
TDS return filing
Drafting of Balance Sheet
Note for Proprietorship Registration
- Above prices is illustrative in nature and it will be very depends on the nature of business and number of transactions of business.
- Audit fees Charges will be applicable as the case may be in accordance of statutory law.
Basic Features to Read before starting private limited company
Private company is required to add the word “Private limited” or “Pvt. Ltd.” to end of its name. Private company should have at least two member and two directors. Private company have right to issue debentures to any number of persons.
Features of Public Limited Company
MCA provides the facility for incorporation of public limited company. For incorporation, firstly apply for name through RUN (Reserve Unique Name) on MCA portal. After availability of name from ROC we should file incorporation form i.e. Spice 32, INC 33(for eMOA), INC 34(for eAOA), .