Proprietorship Firm Registration

A sole proprietorship is a business owned and managed by a single individual. From a legal perspective, no distinction is made between the owner and the business. Small investors find the idea of a sole proprietorship attractive due to the ease of formation.

Registration Process

There is no specific registration process under any law for a proprietorship firm, however it is advisable to get some essential registrations done as it improves the operational functioning of the firm.

1. MSME REGISTRATION: It is not mandatory for a proprietorship firm to get an MSME registration but it improves the chances of a business in availing loans and tax concessions.
2. SHOP & ESTABLISHMENT ACT LICENSE: It is not mandatory for all proprietorship firms to obtain Shop and Establishment Act License, but most firms obtain it as per the local laws of the region. It is issued based on the number of employees.
3. GOODS AND SERVICES TAX REGISTRATION: A GST registration is required by a proprietorship firm if the turnover of the business exceeds Rs.40 lakh for suppliers of goods and Rs.20 lakh for service providers (Rs.10 lakh in case of north eastern states). A GST registration also becomes mandatory if a supplier wants to sell his products through e commerce portals like Amazon, Flipkart, EBay etc. and also if they want to engage in inter state trade.
4. TRADEMARK REGISTRATION: It is required if a seller wants to trade his products and services with an exclusive name or brand.

Advantages of a Proprietorship Firm

1. Compared to other forms of business like a partnership firm or a Company, a sole proprietorship can be started with a very small investment.
2. A sole proprietorship is required to obtain registrations or licenses specific to the nature of business only.
3. A sole proprietor is fully entitled to the profits of business as he is the sole owner.
4. Amongst all forms of business, the legal compliances are minimum in a sole proprietorship.
5. A sole proprietor is not required to file a separate return for income tax as the business and the owner are considered to be one and the same.
6. A sole proprietorship is not required to make its financial statements public.
7. A sole proprietor has complete freedom to take decisions with regard to his business.
8. A sole proprietorship is not required to get its accounts audited annually under any specific law. The audit will depend on the nature of business and threshold turnover limits specified for the conduct of the audit.

One Time Payment ₹ 2,499.00