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Proprietorship firm is also called a sole proprietorship firm, it is the easiest and simplest form of business for individuals to run and maintain. In India, most of the traditional businesses such as retail, wholesale, small-scale service providers, and retail and wholesale outlets were mostly registered as proprietorship businesses due to their simplicity and easy setup. The most significant advantage of a proprietorship business is nominal setup and annual cost.
What is a sole Proprietorship Company?
A proprietorship firm is an individual business setup, it is not mandatory to register a sole proprietorship in India. All forms of small business such as street vendors, home-based businesses, traditional retail vendors, and food outlets are generally run by a single person, so we can usually classify them as proprietorship businesses. One of the widely used business structures in our country with minimum compliance with the income tax act.
How to register proprietorship in Chennai?
Registration for a proprietorship is simple in Chennai, registration for a proprietorship means getting registration in the Ministry of micro small, and medium enterprises by applying for the MSME Udyam registration certificate. Practically, this udyam certificate acts as a proof for the date of commencement of business. For proprietorship firms, the bank accounts can be opened if they apply for GST registration, however we should consider whether it will be beneficial if we apply for voluntary GST registration.
Documents required for Udyam MSME proprietorship registration
Documents required for proprietorship registration
1. The checklist
2. Pan card of proprietor
3. Aadhaar card
4. Bank account details
Pricing:
₹1000
Steps to Register
Consultation
Our business registration consultant will discuss the nature of the business and other factors relevant to the registration of a proprietorship business.
01
Advisory
Once we get enough details to guide you through the journey of new business, our client will be provided with advice on what are other registration required, cost structure, annual cost, etc.
02
Documentation
The checklist is sent to the client and other instructions are given, for sending proper documents to facilitate fast and easy approval.
03
Document validation
Once all the documents are checked by our team, and documents are validated for completeness, the client is instructed to clear the payment.
04
Processing
Upon receipt of payment, our internal team will process and submit the application. The certificate will be e-mailed with useful information and other details.
05
Compliance advisory
The client will be provided with information about when to apply for GST registration, and basic details about income tax due dates for income tax return filing.
06
What are the additional registration required
Each kind of business requires different types of registration, let us give some important kinds of business and relevant registrations required along with proprietor registration
1. GST Registration – GST registration is mandatory when turnover crosses Rs.40,00,000 for a supplier who is dealing only in
goods, the threshold limit is Rs.20,00,000 in case the supplier is the seller of goods as well as a service provider.
2. FSSAI registration or license – Every food business operator dealing with food products shall apply for food safety
registration or food safety license based on their turnover and type of business.
3. IEC or import export code application – Import export code is required for every business engaged in the import or export of goods or services.
4. Tan number application – TDS should be deducted by a person on a certain transaction when turnover or transaction amount crosses a certain limit, subject to other conditions. We request you take care of TDS compliance properly to avoid huge penalties and interest.
5. Fire safety – A fire safety license is mandatorily applicable for restaurants, supermarket, etc, and other business which is subjected to the risk of fire accidents
From Auditor DESK
We recommend MSME Registration as a primary document that every proprietary firm should have for business existence.Frequently Asked Questions
We make it easy for you to find the answer to frequently asked questions here...
Proprietor firm does not have a separate legal identity, the pan number of the proprietor will be used for all filing income tax returns, GST registration for proprietorship business, IE code application, etc. The proprietor is not distinct from the proprietorship firm, in fact in all communication it is directly addressed to the proprietor instead of the firm
Proprietor needs to apply for a trademark application for protecting the business brand name, in most case proprietorship business is opted for a business that does not require brand value, so in case if you plan to establish your brand you can opt for a partnership or private limited company registration because it gives the flexibility to expand by adding another person into the business.
You can sell your business to another person, however for the transfer of business key person such as a proprietor in case of the firm cannot be replaced like a partner in a partnership firm, so the person taking over the business need to get registered separately under different acts
Once registered your udyam number will be active lifelong as per current rules, there is no such requirement to file a periodical return, however, we need to update any changes in the business address nature of business, etc.
The Old Udyog Aadhar number is still valid, but when we need to update it we can do it only by migrating through udyam registration, so if you’ve already applied for udyog Aadhaar registration we need a UAM number for migrating to Udyam registration.
Tax rates relevant to the individual are applicable to the income of the proprietorship firm, income from a proprietorship business is assessed as income from business or profession in the hands of the proprietor
If his or her total income is less than the basic exemption limit then there is no requirement to file an income tax return, in certain case total income for the purpose of determining the requirement to file an income tax return is calculated without allowing certain deductions and exemptions, in simple if you have income deductions and exemptions it is better to approach income tax consultant for proprietorship business who can advise you on the subject
Absolutely, there are no restrictions on it, however it is suggested to avoid replicating the name of other businesses for undesired purposes. Choose names that convey your nature of business in a better way
There is no such condition regarding the minimum capital amount required, we suggest you work out the amount of investment required for assets, working capital required, initially set up and basic branding cost, mostly in the case of the service sector initial investment will be considerably lower as there will not be any blockage of funds in goods in trade
Self-employed in the strict sense means doing business individually without any team under the individual e.g.: a self-employed computer technician, self-employed person practically does not have a separate brand working for him, while sole proprietorship tends to grow on a large scale, establish a brand name, etc
Giving your business brand name, proper current account operations and separation of business transaction and personal transactions will surely give an added advantage of the bank overdraft facility, additional loan amount eligibility as financial statements will be available for running a business, etc
Expert guidance for every sole proprietorship business owner
- Always calculate profitability with GST registration and without GST registration if it is not mandatory, as GST registration is practically made into a primary document for current account opening by most of the banks we should not tend to register GST immediately without any calculations.
- File income tax return each year within the due date
- Keep personal transactions and business transactions separate so that it is helpful for the assessment of financial growth, working capital management, and proper financial planning.
- A proprietorship business is a flexible form of business structure that is not specifically monitored by any of the specific acts, rules, or regulations, so in most cases, we ignore giving importance to business documentation, accounting, etc. Every business requires to be streamlined business processes and procedures which is irrelevant to the form of business, there are thousands of proprietary businesses with a few 100 crores only because their proprietors considered their business requirement rather than a legal requirement.
- If you are comfortable spending a few thousand more, it is recommended to opt for partnership firm registration as it gives more advantages of separate legal identity, improved credibility, and flexibility to add and remove partners.
- The only practical and considerable disadvantage between partnership and proprietorship is TDS provisions are applicable irrespective of the turnover limit for the business.
- A self-employed individual can opt for a proprietorship form of business which will give them an advantage in future business development through the advantage of improved credibility, the minor difference can make your future success, and business transactions made through current accounts make wonders for certain business needs
- Capital-intensive businesses should go for other forms of business structure, proprietorship will face a deadlock situation in case of rapid expansion and financial needs.
