How to build a proprietorship firm in India?
As mentioned earlier, a sole proprietorship firm in India implies that only a single person will be managing the business. In general, it would not need any registration as such. It would be possible for any person who is planning to start a business with less capital to choose this kind of business firm.
It is the single proprietor or owner who will be responsible for handling the business. This kind of business will be ideal for any individual who is planning to start his business from his residence or on the premises having less capital.
A single proprietor will be performing the investment for this proprietorship business. He would be bearing the losses of his business and also enjoying the profits. He is accountable for controlling the business and also managing it. Although he could hire individuals to conduct the business, he will be the sole owner of the business in the long run.
Lots of local businesses like beauty parlors, retail shops, boutiques, grocery stores, and so on can be established as proprietorship firms in India. It would also be possible for small manufacturers and traders to build a sole proprietorship firm.
What are the laws and regulations for starting a proprietorship company?
No legal formality or registration process will be involved while starting a proprietorship firm in India. However, it is important to have business licenses as well as tax registrations. Furthermore, trademark registration is also recommended.
1. Business licenses
Every business will require licenses at present. For example, a restaurant or a doctor will require a valid license to provide their services. As a result, it will be imperative to comprehend the regulatory framework surrounding that particular activity that you’d like to perform in the proprietorship. You should procure a valid license from the respective state, local, and central governmental authorities.
2. Tax registrations
The proprietorship firm needs to get tax registrations from the pertinent tax authority which will depend on the sort of activity that the proprietorship firm is going to perform. Several of the tax registrations needed by a partnership consist of GST registration, professional tax registration, and ESI/PF Registration.
3. Trademark registration
Any proprietorship can be operated under virtually any name so long as it does not conflict with any trademark registration or other rules and regulations. There is no registry or register for proprietorship companies in India. Consequently, it will be advisable to procure a trademark registration if the name of the business has to be used solely for identifying services and goods originating from the company.
4. Opening a bank account
One of the initial steps to build a proprietorship in India will be to open a bank account in the company’s name. Below we have mentioned some documents and only 2 of them will be required for opening the bank account.
• GST registration certificate.
• license or certificate issued under the Shop & Establishment Act by the municipal authorities.
• IEC issued by the office of the DGFT to the proprietary concern.
• Licensing or registration document used in the proprietary concern’s name by the state government or central government authority or department.
What are the benefits of a proprietorship firm in India?
There are several benefits of opening a proprietorship firm in India. Here, we mention several of them.
• Simple to establish – No particular registration process will be required for opening a proprietorship company. As a result, it will be possible to open a proprietorship in India without any sort of registration at all. However, Trademark Registration can be procured optionally for creating and safeguarding a business entity by using the Aadhaar and PAN of the promoter.
• Simpler to operate – It is a fact that there will be no concept of any board meeting or consent from any other individual in a proprietorship company. It will be very simple to operate the business since only a single person will be responsible for controlling the business.
• Employment – It will be possible for the proprietorship firm to hire employees, which can result in plenty of benefits related to job creation, for example, tax breaks. Moreover, it would also be possible to employ the spouses of the proprietor and there is no need to formally declare her as an employee for that. It is also possible for married couples to start a proprietorship company, although only one individual will be assuming responsibility.
• Making decisions – It is the owner of the business who will be making all the decisions. The sole proprietorship can also be transferred by the owner at any particular time if required.
Why choose TaxSavvy to enlist your business as a proprietorship firm?
It can be a risky venture to own a small business. However, it will be a good idea to incorporate your business with the help of TaxSavvy at the earliest. Although more paperwork and expenses will be required for incorporation as compared to a partnership or sole proprietorship, it will provide you with several advantages.
At TaxSavvy, we will help you to safeguard your assets in the best possible way. This implies that you will be able to conduct your business without risking your cars, homes, savings, or any other personal property. Moreover, it is going to enhance the credibility of your business. On most occasions, customers, business associates, and suppliers are of the notion that corporations are more stable as compared to businesses that are not incorporated. After registering with our company, you will have easier access to capital as well. This will help your business to prosper and develop successfully. Moreover, in case you’re planning to get a bank loan, then incorporating your business will encourage most banks to lend money to you.
Thus, it is apparent from the above discussion that it will be a sensible idea for you to incorporate your company without any hesitation whatsoever. We, at TaxSavvy, have been providing our services for quite some time and will help you to get the job done successfully and flawlessly. So, do not give any second thoughts, and register your company with us today!
