There are many types of business, and a proprietorship firm is one of the popular forms of Business Structure. Proprietorship or sole proprietorship is owned, controlled and managed by one single person and utilised by small businesses operating in the unorganised sectors. It is mostly considered by small merchants and traders as a business structure.
Grocery shops are of good example of a Proprietorship firm as they require Low cost in setting up and minimal compliances that attract small-level investors. It best suits those who plan to put up businesses that are mostly small or unorganised.
The Services which are included in our package are as Follows:
1. MSME Udyam Registration
2. CA Certificate
3. TAN
4. GST Registration
1. Name & Nature of Firm
2. PAN Card
3. Aadhar Card
4. Electricity Bill
5. Rent Agreement (in case of Rented)
6. Photo
7. Mobile No & Email ID
8. Bank Account Details
1. Cheap as Compared to any other Form of Business:
Registration of a proprietorship Business is cheap as compared to any other forms of Business.
2. Easy to Establish with Fewer Formalities:
Registration is quite simple, and hence, one may find it easy to complete the formalities.
3. Low cost and Taxes:
Income tax is not needed for proprietorship up to 3 lakh rupees of income. One of the major drawbacks presents here is the absence of tax deductions that are usually otherwise available with entities such as LLP.
4. Privileged to choose any Name:
Proprietorship Firm Registration gives the privilege to choose any name as compared to any other form of Business.
5. Cheaper Bank Loans:
Proprietorship Firm Registration gives the privilege to choose any name as compared to any other form of Business.
6. Access to Mudra Laon Scheme of Government:
Registration of the Proprietorship Form of Business Helps in Availing the Mudra Loans Scheme.
1. Unlimited Liability:
A proprietor is personally liable for all the future liabilities of the proprietorship firm, which can occur due to constant losses in the business. To pay off the debt or obligations of the business, the proprietor has to sell his personal assets, like the house, jewellery, etc. or face insolvency proceedings in his name.
2. Transferability:
Because all the tax registrations like GST, Income Tax and Import Export Code are linked with the PAN Number of the proprietor, hence, in case you wish to transfer the business to someone else, then it can’t be transferred as a going concern. In other words, the business as such is not transferable.
3. Lifespan of proprietorship
The existence of a proprietorship firm is tied to the life of the proprietor. On the demise of the proprietor, the firm also comes to an end. The remaining assets or liabilities are then transferred to the legal heirs as per law by the court of law.
4. Funding or Angel Investor:
The proprietorship firm does not have the ability to raise equity funds from angel investors or venture capital firms. The banks, NBFCS and other financial institutions also do not favour the financing of a proprietorship firm.
Q. Who can be a Proprietor?
A. The Proprietor must be an Indian citizen and a Resident of India.
Q. How much money is to be invested while starting a Proprietorship Firm?
A. There is no limit on the minimum capital for starting a Proprietorship. Therefore, a Proprietorship can be started with any amount of minimum capital.
Q. Are you Personally Liable for a Sole Proprietorship?
A. Yes, you are personally liable for your sole proprietorship as it is owned by a single Person only.
Q. Can I later convert my Proprietorship into a Company or LLP?
A. Yes, the proprietorship can be converted to an LLP or a Private Limited Company.
Q. Will my Proprietorship firm have a Certificate of Incorporation or Registration?
A. There is no certificate of registration or incorporation for a proprietorship business as such. The legal identity of proprietorship as an entity is determined through various other registrations or licenses obtained in the name of the proprietorship firm on a case-by-case basis. Similarly, each specific registration shall result in the issuance of a certificate of registration, for example, GST Certificate, MSME Registration Certificate, Tan Allotment Letter, etc.
Q. Under which Government Authority, the application for Sole Proprietorship Firm Registration submitted?
A. There is no law which enforces registration of a proprietorship firm as such; the MSME registration is done under the Micro, Small and Medium Enterprises Development Act, 2006 of the Central Government.
Q. Does the proprietor have to be an Indian to start a Proprietorship firm?
A. Yes. Only an Indian Citizen can start a proprietorship business. Similarly, no foreign funding is allowed in a proprietorship form of business. However, an NRI or a Person of Indian Origin (PIO) can invest in a proprietorship with prior approval from the central government.
