A sole proprietorship is a type of unregistered business entity that is owned, managed and controlled by one person. Sole proprietorship's are one of the most common forms of business in India, used by most micro and small businesses operating in the unorganized sectors. Proprietorships are very easy to start and have very minimal regulatory compliance requirement for started and operating. However, after the startup phase, proprietorship's do not offer the promoter a host of benefits such as limited liability proprietorship, corporate status, separate legal entity, independent existence, transferability, perpetual existence - which are desirable features for any business. Therefore, proprietorship registration is suited only for unorganized, small businesses that will remain small and/or have a limited period of existence.
STEP 1. Startup Consultation
Proprietorships do not have a process of incorporation. Therefore, our Business Advisors will advise you on the way the identity of the Proprietorship business can be established through other Government registrations.
STEP 2. Service Tax Registration
The identity of a Proprietorship can be established through Service Tax Registration (if applicable) mentioning the business name. Service tax registration takes 10 to 15 days, subject to Government processing time.
STEP3. MSME Registration
The identity of a Proprietorship can be established by MSME Registration (if applicable) mentioning the business name. MSME Registration can be completed in 10 to 15 days, subject to Government processing time.
Easy to Start
Proprietorship needs minimal registration. Therefore, it is one of the easiest form of business entity to start with minimal formalities. However, after starting up a Proprietorship, it is relatively harder to open a bank account or obtain a payment gateway in the name of the business - since more registrations like VAT or Service Tax or GST Registration may be required.
Proprietorship with less than Rs. 3 lakhs of income is not required to pay any income tax, as proprietorship's are taxed as the individual owning the business. However, unlike a company or LLP, a proprietorship cannot enjoy some of the tax deductions, which could potentially increase the tax liability.
Since the name of a proprietorship is not registered, a proprietorship can choose to have any name - as long as it does not infringe on a registered trademark. However, since the name is not registered, any other person can also use the same business name unless trademark registration is obtained.
A proprietorship is the only type of business entity that can be registered and operated by one person. To register a one person company, a nominee Director is required and for all other types of entities like company or LLP or partnership firm, two or more promoters are required.
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