Proprietorship Firm Registration

Introduction

Traditional Sole Proprietorship Business is the simplest and most common form of business entity in India. If you are thinking of starting your business in the form of sole proprietorship form, then here is what you should know.

Meaning of Sole Proprietorship

A sole proprietorship is a traditional unregistered form of business entity, which is run by a single person. In such a form of business entity, there is no distinction between the business and the businessman. The sole owner of the entity is entitled to all its profits and property at the same time he is liable for all losses and expenses. Therefore, the liability of its owner is unlimited.

To start a sole proprietorship, you don't need to do any legal formality or paperwork. If you are the sole owner of a business, you automatically become the sole proprietor and your business will be said to be a sole proprietorship.

Business licenses and permits

Depending upon the industry in which you are operating you may need to obtain various business licenses and permits. There are some industries in which a business cannot take place unless and until it has obtained a license from the concerned authority. To know more about such license requirements, you can directly contact to the team of experts at CorpIQ.

If the name of the owner and that of the business entity is different, in such a situation most localities will require you to register your business name. By doing so you inform the authority and the general public that the business is operating by that name and you are the owner of that business.

FEATURES OF SOLE PROPRIETORSHIP FIRM

• Minimal paperwork and low cost involved in setting up a proprietary firm.
• It is easy to manage as it involves low compliance as compared to other forms of business entities.
• The liability of the sole proprietor is unlimited, which means his personal assets can be used in the event the assets of the entity are not sufficient to pay off the debts of the organization.
• You don't need o separately show the taxation of the business, as its income can be clubbed into the income of the proprietor.
• Sole proprietor has complete control over the affairs of the company, and he is solely entitled to all the profits and assets of the entity.
• It has no separate legal entity from that of its owner, which means the life of the firm is restricted to the life of the owner. Its existence comes to an end with the death of the owner.

VARIOUS LICENSES REQUIRED TO BE TAKEN BY PROPRIETORSHIP

As discussed above, there is no registration requirement to set up a sole proprietorship firm. However, it is to be noted that there are various licenses and permits which are required to be taken for carrying on the business even as a sole proprietor. The requirement of these licenses depends upon various factors such as state, Industry, and local regulations. Some of such licenses are discussed below-

• FASSAI Registration- FASSAI stands for Food Safety and Standards Authority of India. If any entity including a sole proprietorship is engaged in 
• food products or is working as Food Business Operator (FBO) in India, such entity is required to obtain registration or license under Food Safety and Standards Act, 2006.
• GST Registration- Under Goods and Services Tax (GST), businesses whose turnover exceeds the threshold limit of Rs. 40 Lakh or Rs. 20 Lakh or Rs. 10 Lakh as the case may be or which intends to carry on any online business in India, must register as a normal taxable person. If any organization exceeds the threshold or it carries on online business without GST registration, then it will be an offense under GST and heavy penalties will apply.
• MSME Registration- MSME registration is an optional registration under the MSMED Act that provides Micro, Small, and Medium sized enterprises with benefits such as concessional interest rates, tax benefits, and access to a range of subsidies and schemes aimed at developing MSME.
• Shops and Establishment Act Registration – In some states, the proprietor will also have to obtain Shops & Establishment Act registration.

DOCUMENTS REQUIRED FOR SOLE PROPRIETORSHIP FIRM REGISTRATION UNDER VARIOUS ACTS

• Self-attested copy of PAN Card of the proprietor
• Electricity/water bill (Business Place)
• Self-attested copy of Aadhaar card/ voter identity card
• Digital Signature Certificates of the proprietor
• Photograph of Proprietor and Authorized signatory
• Bank Account details such as canceled cheque
• Rent/lease agreement of the place where the entity is situated
• Additional documents such as Aadhaar Card, Driving License, Passport, or Voter ID in the name of the Owner should also be provided

 PROCEDURE FOR REGISTRATION OF PROPRIETORSHIP

You can easily obtain registration under the above-mentioned Acts with the help of CorpIQ Team as there is no such individual registration for Proprietorship registration.