Those want to start a business on small scale with single ownership in the unorganised sector, they can start with Proprietorship. Government of India did not provide any mechanism for registering as Proprietorship so far. Therefore, it can be done through GST registration and other business registrations as per rules and regulations of that business. In case of Proprietorship, Proprietor is personally liable for all liabilities of that proprietorship.
Documents Required For Propritership
PAN for Indian nationals, Notarised passport copy for foreign nationals
Passport, Driving licence, Aadhar, Bank Statement(2 months old)
To prove access to the registered office, a recent copy of the electricity bill or property tax receipt or water bill must be submitted. Along with the utility bill, rental agreement or sale deed and a letter from the landlord with his/her consent to use the office as a registered office of a company must be submitted.
Propritership Registration Faqs
What is the minimum number of people required to start the proprietorship registration?
With only one person can start this registration and it will have only one promoter.
Is there any minimum limit on the capital to start the Proprietorship?
No, there is no minimum capital limit to start the proprietorship.
What is the procedure for opening bank account?
As per RBI rules, Proprietor shall provide two forms of registration along with PAN card, identity proof and address proof of the proprietor . Two forms of registration can be any of the tow following: GST registration, MSME registration, shops and establishment registration, professional licence, CA certificate.
Is it possible to transfer my proprietorship?
No, but only assets can be transferred to another person through sale.
What are the annual compliance requirements for a Proprietorship?
Proprietorship will have to file their annual tax return with the Income Tax Department. Other tax filings like GST filing may be necessary from time to time, based on the business activity performed. However, annual report or accounts need not be filed with the Ministry or Corporate Affairs, which is required for Limited Liability Partnerships and Companies.
Is audit required for a Proprietorship?
It is not necessary for Proprietorships to prepare audited financial statements each year. However, a tax audit may be necessary based on turnover and other criterion.
Can I later convert my Proprietorship into a Company or LLP?
Yes, there are procedures for converting your Proprietorship business into a Company or a LLP at a later date. However, the procedures to convert a proprietorship business into a Company or LLP are cumbersome, expensive and time-consuming. Therefore, it is wise for many entrepreneurs to consider and start a LLP or Company instead of a Proprietorship.