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Proprietorship Startup

Proprietorship Firms in India!

A sole proprietorship could be a kind of unregistered business entity that is owned, managed, and controlled by one person. The sole proprietorships Registration is the most common kind of business in India and it is used by most micro and small businesses operating in the unorganized sectors.

Who could be a proprietor?

The proprietorship business in India is named a proprietor. It can’t be a company or legal entity. The proprietor and therefore the proprietorship is considered to be an equivalent entity legally.

The PAN and other documents of the proprietor are the premises for obtaining all other business registrations and licenses. just in case of any problems with liability within the business, the proprietor is held personally answerable for it.

Proprietorship Registration is simple to begin and has minimal regulatory compliance requirements for operating. This entity is good for entrepreneurs who are getting into business for the first time and small businesses with few clients.

The entrepreneur can start operations and receive payments from clients as no registrations are required to begin a proprietorship.

The opposite advantage of a Proprietorship is that it requires no additional compliance in most cases. The PAN of the proprietor and proprietorship are one and therefore.

Key registrations

Each proprietorship differs in terms of the functions, clientele and the mode of operations. Hence, a few of the registrations mentioned below are going to be applicable

MSME registration

MSME or Udyog Aadhaar registration is often obtained within the name of the business to determine that the only proprietorship is registered with the Ministry of Micro, Small and Medium Enterprises.

Current account

Accounting is often opened for a sole proprietorship through Us from various banks in India. Us offers exclusive partnerships through which zero-balance current accounts will be opened. it’s recommended that GST registration be obtained for a similar.

TAN registration

TAN registration must be obtained for the proprietor from the revenue enhancement department if the proprietor is making salary payments wherein a TDS deduction is required.

FSSAI registration

In case the proprietorship is involved within the selling of food products or handling of food products, FSSAI registration must be obtained from the Food Safety and Standard Authority of India within the name of the proprietor.

GST registration

GST registration must be obtained if the proprietor is selling goods or services that Inter-state & Local cross the GST turnover threshold limit for registration. In most states, GST registration is required for service providers having annual revenue of up to Rs.20 lakhs and just in case of traders annual revenue of up to Rs.40 lakhs.

Import Export Code

Import Export Code or IE code will be obtained from the DGFT within the name of the business – just in case of a proprietorship business undertaking export and/or import of products into India.

Benefit of a sole proprietorship

1. Single ownership:  one individual owns the only proprietorship’ that individual owns all the assets and properties of the business .he alone bears all risk of the business.

2.NO SHARING OF PROFIT &LOSS: the whole profit out of the only proprietorship business goes to the only proprietor. If there’s any loss, it is also borne by the only real proprietor alone nobody else shares any of the profit and loss of the business.

3. LOW CAPITAL: the capital required by a sole proprietorship is completely arranged by the only proprietor. he raises the capital either from his personal resources by borrowing from friends, relatives, banks, or financial institutions. since there’s just one person raising capital very low capital are often raised.

4. ONE-MAN CONTROL: the controlling power during a sole proprietor business always remains with the owner alone. The owner or proprietor alone takes all decisions to run the business. He may take decision though a consultant or some advice, but the ultimate decision are always in his hand.

5. UNLIMITED LIABILITIES: The liabilities of a sole proprietor is unlimited. this suggests that just in case of loss the business asset alongside the private properties of the proprietor shall be wont to pay the business liabilities.

6. ALMOST NO LEGAL FORMALITIES: The formation and operation of a sole proprietorship require almost no legal formalities. However, the owner could also be required to get a license from the local administration or from the health department of the govt, whatever is important counting on the character of the business.

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After that Rs: 500/- Monthly Accounting Fee up to Rs: 25 lakh Turnover.

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