Proprietorship Business
When an individual decided to perform business as sole trader or as Proprietor then the business name has to be registered with one of many options available such as GST, IE code, MSME etc., with the government to make the business legal and to get bank account on the company name.
Proprietorship or sole proprietorship which is also known as sole trader, is a type of business entity owned and operated by one person. It is also like a individual giving business name for himself to perform business activities professionally.
Proprietorship Firm Registration
Main objective of Proprietorship Firm Registration is to Open Current Bank Account on the Name of Business so it's a simply firm which is enable doing business in India with Less Compliance and Less Costing. A Sole Proprietorship Firm require minimum 2 Legal Entity Proof to open a Current Bank Account.
Legal Entity Proof for the Sole Proprietorship Registration in India
Option 1 : MSME Registration Certificate + Chartered Accountant Business Certification.
Its applicable in below conditions –
Option 2 : GST Registration Certificate as Proprietorship Entity
Its applicable in below any ONE conditions –
So your first step to choose the right legal entity certificate to register your proprietorship firm registration.
Income Tax Rate for a Proprietorship Firm
The income tax rate for proprietorship is the same as the income tax rate for individuals. Unlike the income tax rate for LLP or Company which are flat rates, proprietorships are taxed on slab rates .
Audit for Proprietorship
Income Tax laws make it mandatory for a proprietorship to get its books of account audited from a practising CA under the following conditions
Major Compliance for Proprietorship
Proprietorship firms are required to maintain compliance like LLPs and Companies registered in India. Proprietorship firm compliance mainly includes filing of income tax return. In addition to the basic compliance, proprietorship firms may also be required to comply with TDS regulations, GST regulations, ESI regulations and others. The compliance requirement for a business would vary based on the type of entity, industry, state of incorporation, number of employees and sales turnover.
The Proprietor must be an Indian citizen and a Resident of India. Non- Resident Indians and Persons of Indian Origin can only invest in a Proprietorship with prior approval of the Government of India.
There is no limit on the minimum capital for starting a Proprietorship. Therefore, a Proprietorship can be started with any amount of minimum capital.
It is not necessary for Proprietorships to prepare audited financial statements each year. However, a tax audit may be necessary based on turnover and another criterion.
Proprietorship firms are business entity that are owned, managed and controlled by one person. So Proprietorship firms cannot issue shares or have investors
No, the Proprietorship firm and the Proprietor are one and the same. The PAN Card of the Proprietor will be the PAN Card of the Proprietorship business. Therefore, there will be no separate legal identity for the business. The assets and liabilities of the Proprietorship business and the Proprietor will also be one and the same.
