Sole Propritorship firms are best for the local businesses run by an individual on a smaller level. They have very few formalities and the registration process is straightforward. Like Private Limited Company Registration, they do not need compliance, non-compliance of which can lead to heavy penalties. This is one of the safest business entities that doesn’t need much investment. It can be started with little funds. Hence if you are thinking about starting a business in your locality with less funds and do not want to start with very hectic compliances you can start with proprietorship registration. But it does not mean this business entity is just good for the mentioned business type. You can choose it for other businesses as well. Here we are guiding you about the best choices.
What is a Proprietorship Firm?
A business run and registered under the name of a single person is called a proprietorship and registration of such business is called Sole Proprietorship Registration. It is meant for those who want to run their own companies without interference from outside parties. Such entities don’t even require their own registration. Proprietorship firms can be identified by the GST registration, MSME registration, or any other registration that is comparable. One of the main differences between a proprietorship and a firm is that proprietorships are simpler to register than partnership firms.
Sole Proprietorship Firm V/S One Person Company
One sentence cannot adequately address the aforementioned query. Because it is impossible to arbitrarily declare that a One Person Company is preferable to a sole proprietorship. It is entirely dependent upon the wishes of the business owner as well as the actions of other businesses. Small firms operated by one person in a specific area with no plans for future growth or who are unsure if they want to develop their business at all are best served by sole proprietorships.
On the other hand, a mid-sized or a big company that employs multiple people and has expansion goals may choose to work with a One Person Company. Nothing compares to which is superior. Both work effectively in various contexts and for various kinds of enterprises. Rather than learning about superiority, attempt to understand the distinctions between them. This will assist you in selecting one from them.
How to Register a Proprietorship Firm?
In order to register a proprietorship firm there is no such separate platform or process like the other entities. This firm is mostly registered through other registrations. These other registrations includes but not limited to the following:
Select a Unique Name
Just like the other entities, this firm also needs to have a unique name. Thus the very first thing you need to do in order to register a proprietorship firm in India is to think about a unique name for your firm. Without having a name you cannot register an entity, hence you must have a good pre-decided name for your firm.
Collect All the Documents
In order to register any type of entity paperwork is very important. Without proper or complete paperwork it is not possible to register any type of entity. Same goes with the proprietorship registration. The second step after choosing or selecting a good name for your firm you should collect all the papers or you can say documents in order to register it. After collecting all the documents you shield, move ahead with the further process of the registration of the proprietorship firm.
Obtain GST Registration
As there is no separate method of proprietorship registration, by registering GST one can register their sole proprietorship firm in India. If you have ever seen the goods and services tax registration certificate, you may have seen that in that certificate there is an option of “constitution of business’ ‘. In this option type of entity has been mentioned. Hence if you are going to register your entity as proprietorship, in that column it will be mentioned and this is how proprietorship registration will be done.
Obtain MSME Registration
MSME or Udyam Registration is another option through which one can do proprietorship registration in India. In the MSME registration certificate a column of “Name of Enterprise” has been written from which type of entity can be recognized. Hence if you registered as MSME then you will automatically be recognized as proprietor through the certificate of the udyam registration. It is the most easy way to register a proprietorship firm in India. Through this registration called MSME or Udyam you can do proprietorship registration within a day.
Obtain Aadhaar and PAN Card of the Proprietorship Firm
Aadhaar Card is not only important for the humans but also for the entities. Therefore in order to identify a sole proprietorship firm the owner of the business must get the Aadhaar card for their entities. Same goes with the proprietorship firms. They also need to obtain an Aadhaar card with the help of the competent authorities. For all the entities in the present time one of the most important documents is PAN Card. hence you must obtain a PAN Card for your proprietorship firm. The methods of obtaining the same are online.
Open a Bank Account
To make the transaction of the business clear and confusion free you must open a bank account for your proprietorship firm on its own name. And after that all the transactions related to the firm must be done through this account. This will help you out while managing the company’s transaction and it is really important for many other purposes.
Documents Required to Get Proprietorship Registration
Required documents for the proprietorship registration are:
- Identity proof related documents of the proprietor of the firm
- Address proof related documents of the proprietor of the firm
- Business address proof of the firm will be required
- Bank statements of the proprietor of the firm
- Utility bills like telephone bill or gas bill
- Details of the last years ITR return filings if any
How to Obtain Proprietorship Firm Registration Certificate?
This question mentioned above is the most basic question many experts have to face every now and then. Because people have a general perception that after the registration process is done one will get the registration certificate which is not true when it comes to a proprietorship firm. This is because such firms are registered through other registration which are mentioned in the registration process. There is no separate registration process for such kinds of entities, hence there is no separate certificate for the proprietor registration.
Benefits of the Sole Proprietorship Registration
Some of the key benefits of the proprietorship registration are:
- The process of registration is very easy
- The formalities of the registration of such entities are less in comparison to other entities
- Easy to maintain
- Less companies in comparison to other entities
- Easy management as well as oppressions of the company
- Proprietor is the sole owner of the business
- No interference in the decisions of the company
- Proprietor takes all the important decisions of the entity
- Decision making is easy and less time consuming
- Proprietorship can easily converted to different entities
Conclusion
In order to start a small business in a particular area with limited funds and investments you should register your firm as a proprietorship. Proprietorship registration provides you ease of doing business in many ways. The best thing about this firm is that it has less formalities as well as compliances which will save money as well as time. This money and time can be invested in the business which will help your business grow. If you want to register such a firm but are confused , feel free to contact us. We are just one click away.
