Proprietorship
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Documents Required
- Pan Card
- Aadhaar Card
Proprietorship Registration
In India, establishing a sole proprietorship is one of the oldest and simplest business structures. A proprietorship is owned, managed, and controlled by a single person—the proprietor. This structure offers ease of initiation with minimal compliance requirements.
Ownership and Structure
A proprietorship is synonymous with its owner, making the setup process straightforward. However, it prohibits additional partners or shareholders and lacks limited liability protection, making it suitable for small businesses with up to 5 employees.
Registration Process
Unlike other business entities, proprietorships don’t have a dedicated registration process. Instead, they gain recognition through tax registrations like GST, formalizing their status.
Essential Registrations
Key registrations include obtaining a PAN and Aadhaar card for business identification, registering under UDYAM for government benefits, and acquiring GST registration if revenue surpasses thresholds.
Vital Licenses and Registrations for Proprietorships
To operate a proprietorship in India, essential licenses and registrations include:
- Obtain a Permanent Account Number (PAN) and an Aadhaar card for business identification.
- Enroll under UDYAM to gain recognition as a Micro, Small, or Medium Enterprise (MSME), accessing government benefits.
- If your business exceeds specific thresholds, register for Goods and Services Tax (GST) to manage GST collection and payments.
- Establish a dedicated bank account for seamless financial management.
- Depending on your business’s location, adhere to local labor regulations by registering under your state’s Shops and Establishment Act.
Advantages
- Easy Registration: Minimal formalities are required, with most proprietorships registered only with tax departments.
- Lower Compliance: Compared to entities like LLP or Company, proprietorships have reduced regulatory burdens.
- Simplicity: With no partners or directors, operations are streamlined, ideal for very small businesses.
- Decision Making: Sole proprietors enjoy autonomy in business decisions, facilitating quick actions.
- Complete Control: Owners have full control over assets, revenue, and operations.
Disdvantages
- Funding Limitations: Sole reliance on personal finances restricts fundraising options.
- Personal Liability: Owners are personally liable for business debts, risking personal assets.
- Business Continuity: Sole proprietorships dissolve upon the owner’s death or incapacity.
- Growth Constraints: Limited fundraising, liability, and continuity hinder scalability.
- Unincorporated Status: Lack of centralized records complicates identifying active proprietorships.
Registering a Proprietorship Online through SS Memame
You can easily register a proprietorship online through SS Memame To register a proprietorship, only the PAN & Aadhaar card of the business owner is required. We can help you obtain the following registrations in less than 15 days: GST Registration UDYAM Registration Zero-Balance Business Current Account with LEDGERS Accounting Software Once, you have registered for the proprietorship registration on SS Memame, please follow the steps below and upload the following documents by logging into LEDGERS.
- Step 1: Login to LEDGERS using the email address for payment.
- Step 2: Go to Services Tab & Select Proprietorship Engagement
- Step 3: Upload your PAN & Aadhar Card Copy
- Step 4: An SS Memame Registration Expert will file the registration application with GST Department, MSME Department and Bank for Current Account.
- Step 5: Access to LEDGERS Accounting Software is provided for GST invoicing, GST filing and other services.
PAN Card for Proprietorship Firm
A proprietorship is not a separate business entity. Hence, there is no procedure to obtain proprietorship PAN card. The PAN card of the business owner is used for the proprietorship. rewrite
Obtaining GST Registration for Proprietorship
GST registration for a proprietorship will be obtained by SS Memane & Company as a part of the service. The following documents are required for GST registration:
Bank Account for Proprietorship
- The bank current account for a proprietorship is opened in the business owner’s name using their PAN.
- Proof of business is required. Any two of the following documents can be submitted to create a current account:
- GST registration certificate
- Shop & Establishment Act license
- License issued by the Registering authority like Certificate of Practice issued by Institute of Chartered Accountants of India, Institute of Cost Accountants of India, Institute of Company Secretaries of India, Indian Medical Council, Food and Drug Control Authorities
- Importer Exporter Code (IEC) issued by the office of DGFT
- Obtaining Shops & Establishment Act License for Proprietorship:
- Process varies by state and can be completed online or offline, typically within 2-3 weeks.
- Timelines for Sole Proprietorship Registration:
- Normally registered within less than 15 days, timelines may vary depending on government and bank processing.
Proprietorship vs Limited Liability Partnership (LLP) vs Company
| Features | Proprietorship | Partnership | LLP | Company |
|---|---|---|---|---|
| Definition | Unregistered type of business entity managed by one single person | A formal agreement between two or more parties to manage and operate a business | A Limited Liability Partnership is a hybrid combination having features similar to a partnership firm and liabilities similar to a company. | Registered type of entity with limited liability to the owners and shareholders |
| Ownership | For One Person Company | |||
| Registration Time | 7-9 working days | |||
| Promoter Liability | Unlimited Liability | Limited Liability | ||
| Documentation | ||||
| Governance | – | Under Partnership Act | LLP Act, 2008 | Under Companies Act,2013 |
| Transferability | Non Transferable | Transferable if registered under ROF | Transferable | |
| Compliance Requirements | Know More | |||
One Person Company (OPC) Registration FAQs
Q: What is an OPC, and how does it differ from other business structures?
A: An OPC, or One Person Company, is a unique business structure in India that allows a single individual to operate as a company, combining the advantages of a sole proprietorship with the legal protection of a private limited company.
Q: When was the concept of OPC introduced in India?
A: The concept of OPC was introduced under the Companies Act of 2013.
Q: What is the primary objective of OPC registration?
A: The primary objective of OPC registration is to promote entrepreneurship and encourage the formalization of Micro, Small, and Medium Enterprises (MSMEs).
Q: What are the eligibility criteria for OPC registration?
A: To register an OPC, you must be a natural person and an Indian citizen, resident in India for at least 182 days during the previous calendar year. The OPC must have a minimum authorized capital of Rs 1,00,000, and a nominee must be appointed.
Q: Can an OPC engage in financial activities like banking or insurance?
A: No, an OPC cannot engage in financial activities like banking, insurance, or investments.
Q: What happens if the OPCs paid-up share capital exceeds 50 lakhs or its annual turnover exceeds 2 Crores?
A: In such cases, the OPC must be converted into a private limited company to comply with regulatory requirements.
Q: How many OPCs can an individual establish?
A: An individual can establish only one OPC.
Q: Can an OPC have a minor as its member?
A: No, an OPC cannot have a minor as its member.
Q: What are the advantages of registering an OPC?
A: Advantages include limited liability, easy fundraising, reduced compliance, simple incorporation, efficient management, and perpetual succession.
Q: Are there any disadvantages to registering an OPC?
A: Yes, disadvantages include suitability primarily for small businesses, restrictions on certain activities, and a potential lack of clear distinction between ownership and management.
Q: What is the registration process for an OPC in India?
A: OPC registration is done through the SPICe+ form, involving obtaining a Digital Signature Certificate (DSC), Director Identification Number (DIN), name reservation, preparation of MOA and AOA, filing forms, and obtaining a Certificate of Incorporation.
Q: What documents are required for OPC registration?
A: Required documents include MOA, AOA, nominees consent, proof of registered office, declarations, and a compliance certificate.
Q: What is the significance of obtaining a Digital Signature Certificate (DSC)?
A: A DSC is used for electronically signing documents during the registration process.
Q: What is a Director Identification Number (DIN), and why is it required?
A: A DIN is a unique identification number for directors, and its required for legal compliance and governance.
Q: How is the registered office address determined for an OPC?
A: The registered office address should be decided and declared during the registration process.
Q: What is the role of a nominee in an OPC?
A: A nominee is appointed to take over the OPC in the event of the director’s death or incapacity.
Q: What is the Certificate of Incorporation, and when is it issued?
A: The Certificate of Incorporation is an official document issued by the ROC after approval, signifying the successful registration of an OPC.
Q: Why should I choose SS Memane & Company for OPC registration?
A: SS Memane & Company offers expert guidance, simplifies the registration process, ensures compliance, and provides dedicated support to make OPC registration hassle-free.
Q: What are the post-incorporation formalities for an OPC?
A: Post-incorporation formalities may include filing a notice regarding the registered office within 30 days after incorporation.
Q: How can SS Memane & Company assist with post-incorporation formalities for OPCs?
A: SS Memane & Company’s experts are ready to assist in fulfilling OPC compliance requirements, ensuring your business remains in full legal compliance.
Our happy clients say about us
Starting my business as a sole proprietorship was made incredibly easy with the guidance and support from SS Memane . Their team provided clear instructions and assistance throughout the process, making it seamless and stress-free. Highly recommended.
I couldn't be happier with the service provided by SS Memane for my sole proprietorship registration. They were efficient, professional, and knowledgeable, ensuring that everything was done correctly and promptly. Thank you for your excellent support!
SS Memane exceeded my expectations with their exceptional service for my proprietorship registration. From start to finish, they were responsive, thorough, and dedicated to ensuring a smooth process. I'm grateful for their expertise and would definitely choose them again!
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