Sole proprietorship
firm
Planning for Start new
online or Offline business??
Online Business Such
as.
* Flipkart,
* Amazon,
* Ebay,
* Snap deal etc...
Offline Business Such
as.
* Stationary Store,
* Snacks Shop,
* Computer & Game Centers
etc...
Proprietorship
Firm
For
a proprietorship firm, there is no separate registration required. Moreover,
there is no procedure for obtaining name approval (as in the case of
companies). You would have to just open a bank account with the firm
name. But in case your business is liable for VAT and / or Service Tax
registration, then you must obtain VAT and / or Service Tax registration.
Further, for a sole proprietorship firm, no separate income tax PAN is
required. The PAN of the proprietor will be the PAN of the firm and proprietor
will have to file income tax return in his personal name.
Steps for register sole proprietorship firm in India for
Startups
Key Features of Proprietorship Firm
·
1 Person Required as
Single Entrepreneur.
·
Single Owner of the
Business.
·
Easy to Start and Easy to
Close.
·
Complete Control.
·
Lower Cost of Formation
and Compliance.
Disadvantages of Proprietorship Firm
·
Lack of Resources.
·
Unlimited Liability.
·
Lack of Credibility.
·
Cannot raise funds
easily.
·
Cannot add Partners.
As a sole proprietor, main objective of the
firm is opening a current bank account on the name of business. so basically
most of the banks ask for any legal certification for the business.
So as per convenience of the readers we can
divide business as 2 Categories.
a) Services Based Business b)
Product/Manufacturing/Sales Business
a) Service Based Business -
These type Business are providing services
Online and Offline to users. Example are - Website Development/Digital
Marketing/Consulting/ECommerce Marketplace/Marketplace Business Models/Tickets
and Hotel Bookings/Classifieds Websites or any other type of business which
providing the services.
So as a Service Based Business mainly need
2 thing open a current account.
·
Service Tax Certification
·
MSME Certification or
Chartered Accountant Certification regarding nature of business. (Required by
some private banks)
Note: - Service Tax Registration Certification
not means that you have to charge the service tax from starting. For the
Clarification just place a request here
with your Queries
Must Read: How to Apply for
Service Tax Registration
b) Product/Manufacturing/Sales Business -
These type Business are selling any product to
customers through own website or offline. They are selling VAT applicable
products to consumer so these type startups fall in this category.
Example are- ECommerce
Website/Importer/Exporter/Selling on ECommerce Marketplace i.e Flipkart/Snapdeal
or offline trading business.
so as a Product or Sales category business
needs anyone minimum two things -
·
Shop Act License ( In the
Maharashtra or Gujarat its called Gumasta and in WB State its called Trade
License)
·
MSME Certification
·
CA Certification
·
VAT/Sales TAX/TIN
Registration.
Note - In the starting you can apply for the
MSME + CA Certification or Shop act license to save the expenses on the
VAT/CST. For the Clarification fill up below
request form with your Queries.
VAT Registration is State wise so it's
Procedure very state to state.
Common Documents Required in Both above cases
register as Proprietorship Firm :-
·
ID and Address Proof
as Pan Card/Passport/Voter ID/Aadhar Card/Driving License Copy of the
Proprietor.
·
One Business Place
Address proof :-
1.
If Property on Rented: -
Need Rent Agreement and NOC from Landlord.
2.
If Property is own: -
Need Electricity Bills or any other Address Proof.
Note: Proprietor Business place and home place
can be same
·
For VAT : -
Needed Security Amount as Fixed Deposit or needed minimum two surety
of dealer which already registered in that state VAT Registration.
Note : In Some State Security Amount or Surety is
not applicable like in Delhi but in Most of the State its applicable and FD
Amount or Guaranteed Amount Very as State wise Rules and Regulations.
How to Register Proprietorship Firm Online?
a) For the Service Tax Registration or MSME or
CA Certification we highly recommend MyOnlineCA which registered more
than 100+ Firms in a month Online through our platform. You can check out on
Facebook where many Small firms give their feedback on the online registration.
b) For the VAT/CS Registration or Shop Act
License in some state user can apply online but again problem is there is
complex online procedure and during the verification officers takes the bribe
or raise the issues. So we recommend take the help from a expert.
We also recommend to watch this Video in Hindi
where you got the idea about the How to Register a Sole Proprietorship Firm in
India.
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