Proprietorship Firm Registration in India

A proprietorship is not a corporate or legal entity, the proprietor and a proprietorship Firm registered in India is the same legal entity. For obtaining the proprietorship Firm registration in India the proprietor must have PAN and other documents. The proprietor is held personally liable in case of any liabilities in the business.

An individual who wishes to sell his/her own products or services can run their business as a sole proprietor, and can enjoy the rights provided to a registered legal company. Most of the entrepreneurs find it as an ideal business entity and have registered their business under it. The loss or profit of the company is considered as the loss or profit of the individual and the income of the company are considered as the income of the owner as per the Income Tax Act.

Proprietorship Firm Registration in Jaipur

Advantages of Proprietorship Firm Registration in India

Less Compliance Cost

The compliance cost for the proprietorship firms is comparatively very less as compared to other forms of business.

Tax Advantage

As the taxable income forms part of the Proprietor’s ITR, the benefit of slab based income tax is available to proprietorship.

No audit Restrictions

Sole Proprietorship does not require getting its accounts audited each financial year.The audit will depend upon the nature of business .

Ease for proprietor

Sole Proprietorships business does not require any specific registrations under any law. It depends on the nature of business 

Easy to Close

There is no specific process to close the proprietorship firm. Simply surrender all registration and licenses and close business.

Limited Capital Requirements

There is minimum or limited capital requirements for sole proprietorship registration. Thereby it is suitable for people with small capital.

Types of Registration for Proprietorship firm Registration

  • Goods and Services Tax Registration

  • Shop and Establishment Act Registration

  • Micro, Small and Medium Enterprises Registration

Documents Required for Proprietorship firm Registration

  • Aadhar card
  • Two coloured Photographs
  • Proof of address (Electricity Bill / Property tax receipt / Sale Deed / Stamped and notarised rent agreement. The bills and receipts must not be older than two months.)
  • PAN card
  • NOC from the owner of Premises in the prescribed format
  • Bank statement or cancelled cheque

Process for Proprietorship firm Registration

1.Choose the name of the Sole Proprietorship-Choosing a distinctive name for your proprietorship is the first step in registering it. The name must be legal and may not violate any registered trademarks’ intellectual property rights.

2.Documentation-The documentation of the owner and the primary location where the proprietorship will conduct its business activities

3.Register with Udyog Aadhar, and MSME- The MSMED Act, 2006 a sole trader or sole proprietor is required to register under the MSMED to carry out activities

4.Register for GST-The Goods and Services Tax Act, 2017 traders are required to obtain registration if the turnover of the business exceeds a specific amount. Turnover would relate to the annual turnover of the business

5.IEC Registration (Import- Export Code Registration)-The sole trader is carrying out export of goods outside India, then IEC registration has to be made by the business

6.Register with the FSSAI-FSSAI registration would only be mandatory where the business is carrying out activities related to making or packaging foods products. This license would also be required if the sole trader is handling food-related products.

FAQs on Proprietorship Firm Registration

Q1: How long does it take to register a proprietorship firm?

A1: The registration process typically takes around 7-15 business days, depending on various factors, including the completeness of your documentation and government processing times.

Q2: Do I need a physical office space for registration?

A2: No, a physical office space is not mandatory for registering a proprietorship firm. You can use your residential address as the business address.

Q3: Can foreign nationals register a proprietorship firm?

A3: Yes, foreign nationals can register a proprietorship firm, subject to certain conditions and approvals.

Q4: Are there any tax benefits to registering a proprietorship firm?

A4: Proprietorship firms in India are taxed at the individual owner’s income tax rates. While there aren’t specific tax benefits, this structure offers simplicity and ease of compliance.

Q5: What is the cost involved in registering a proprietorship firm?

A5: The cost varies based on the services you require, such as legal consultation and documentation. On average, the registration process can cost between ₹3,000 to ₹10,000.

Practice area's of B K Goyal & Co LLP

Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice