Legal Darbar provides you the best Proprietorship Registration:
Legal Darbar helps you in understanding what is an proprietorship registration it is an another name of GST registration (Goods and Services Tax) is Propriertorship registration is a process required for businesses in India that meet their specific turnover on specific operational criteria. Legal Darbar helps in the process of legally establishing a sole proprietorship business in India.
What is Sole proprietorship: A sole proprietorship is a simple business structure operated by and managed by a single person, with low regulatory compliance. While no legal registration is required, proprietors must obtain necessary licenses based on their business type.
Key features the proprietorship registration include:
GST registration (if turnover exceeds ₹40 lakh for goods or ₹20 lakh for services), a Shop and Establishment Act license (if applicable), and a Professional Tax registration (for certain states). Additionally, opening a current bank account in the business name requires documents like a PAN card, Aadhaar card, and business proof. Proprietorships offer ease of management but lack limited liability protection, making them suitable for small-scale businesses and freelancers.
Need Help ?
Who Should Go for a Proprietorship?
🔹 Small traders, investors, and store owners
🔹 Freelancers and consultants
🔹 Home-based businesses
🔹 Service providers (e.g. tuitors, designers)
Types of proprietorship Registration:
- GST registration
- Shop and establishment registration
- MSME/UDYAM registration
- Trade licenses
- FSSAI registration
- Professional tax registration
- Import and export code registration
- Current bank account setup
Steps the Legal Darbar used for registering a proprietorship in India:
1. Select a business name: Ensure that the name is unique and doesn’t violate on trademarks.
2. Obtain PAN and Aadhaar card: The proprietor’s PAN is used for taxation purposes and
Aadhaar card is required for identity verification and bank account opening.
3. Then Register under MSME: (Udyam Registration) which includes loans, assistance, and easier access to government schemes.
4. Open a current bank account: A corporate bank account is required to keep financial records separate.
5. Register for GST: GST registration is required if annual revenue exceeds ₹40 lakh (₹20 lakh for services).
6. Shop and Organization Act Registration: Businesses with a physical location must register.
7. Additional licenses and registrations:
- FSSAI License (For Food Businesses)
- Trade License (For Regulated Businesses)
- Import Export Code (IEC) (for international trade).
Legal Darbar have the best advantages of proprietorship registration:
1. Easy to Start and Low Compliance: There are no difficult legal formalities, such as Pvt Ltd or LLP Can begin with GST registration or a Shop and Business Act license.
2. Complete Control over and Decision-Making: The owner has complete control over the business’s operations and finances. There is no input from partners, shareholders, or directors.
3. Low setup and maintenance costs: There is no registration charge (with the exception of optional allows like as GST and MSME). Compliance costs are lower compared to other business forms.
4. A minimum Tax Cost: Stone slabs are taxed as individuals rather than corporations, hence they are lower than corporate tax rates. All the individuals are eligible for tax deductions.
5. Easy Banking and Business Operations: You can open a business bank account with PAN, Aadhaar card, and GST registration.
Ideal for freelancers, traders, consultants, and small businesses.
6.Legal Formalities: There are no mandatory inspections unless the turnover exceed the limit ₹1 crore and there is no need to submit separate business tax returns income is reported under the personal ITR.
7. Simple Closure: To dissolve a proprietorship, simply cancel tax registrations there are no lengthy legal processes such as bankruptcy for companies. legaldarbar.com
Legal Darbar will tell you how the Proprietorship Registration is important?
- Legal Acknowledgement: Registration makes the firm a separate legal entity, making it easier to function legally.
- Registered sole proprietorships: We can open current bank accounts and ask for business loans.
- GST registration complaince: Required for tax compliance if turnover hits ₹20 lakh (or ₹10 lakh in certain areas.
- Registered businesses: Have higher reputation among customers, vendors, and suppliers when compared to unregistered ones.
- Improves business operations: Enables making it easier to get licenses, permits, and government approvals.
- Trademark & Brand Protection: Registration secures a business name and identification of the brand.
Documentation Required for Proprietorship Registration:
1. Proprietor identification and Address Evidence:
- PAN Card for tax purposes.
- Aadhaar Card for identification verification.
- Additional ID proof: voter ID, passport, or driving license.
- Recent passport-size photos.
2. Business Proof:
- Business Name Proof like invoices.
- Office Address Proof (electricity bill, water bill)
- Rent Agreement and NOC from the owner (if rented).
- Property tax receipt (if owned).
3. GST Registration:
- GST Certificate required if turnover exceeds ₹20 lakh (₹10 lakh in some states).
4. To open a bank account:
- Provide current account proof, such as a GST certificate or business registration paperwork.
5. Additional Registrations:
- MSME Registration for Government Benefits.
- Industrial Shop & Business Act License.
- City/state Trade License.
- FSSAI License for food-related companies.
legaldarbar.com
FAQs for Proprietorship Registration?
A sole proprietorship can exist as long as its owner is alive and desires to continue the business. When the owner dies, the sole proprietorship no longer exists. The assets and liabilities of the business become part of the owner’s estate.
No, there is generally no minimum requirement to start a sole proprietorship, meaning you can begin operating a business as a sole proprietor without any specific legal filings or registration as long as you are the only owner and conducting business activities; however, depending on your location and business type, you may need to obtain specific licenses or register for taxes like GST to operate legally.
A sole proprietor bears full personal liability, whereas in a partnership, liability is shared among the partners.
No, a sole proprietorship does not have a “certificate of incorporation” because it is not considered a separate legal entity from the individual owner.
A GST registration, a PAN card for the proprietor, a Shop and Establishment Act license (depending on the state), a trade license from the local municipality, and potentially additional licenses based on the business type like a FSSAI license for food businesses or an Import Export Code (IEC) for international trade.
The company PAN card is not issued to the sole proprietorship firm as it does not have a separate legal existence like a company.