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Sole Proprietorship Registration Online
The simplest form of Business in India
Start your business as a proprietorship quickly within one day. All you need is MSME (Udyam Registration) & GST Registration to start the proprietorship business. For a single owner, the proprietorship is the simplest form of business and the easiest to create.
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From Startup Specialist
Proprietorship Registration Fee In India
Noted: The Proprietorship Firm Is Suitable For Small Business With 100% Indian Citizen Ownership
NRI/PIO Can Start A Proprietorship Firm on Non-Repatriation Basis.
Foreigners And Non-Citizens Are Not Allowed To Form A Proprietorship.
Table of Content
Overview
Proprietorship Vs OPC
Benefits
Checklist
Documentation
TaxationStart Your Own Proprietorship Easily
The sole proprietorship formation is straightforward. There is no formal registration required. The sole proprietorship is owned and managed by a single owner; no separate deed or agreement is made. However, individual tax or local registration would be required based on the business activity and the business location. Here is the list of the most common registration for the proprietorship.
Shops and Establishment Act: The registration with the labour department under the shops & establishment act is mandatory in all states; the applicability, government fee and registration process differ from one state to another.
Professional Tax: Except in the north Indian states, almost every state imposes a tax on the profession. You should check its applicability and enrol the entity and, when employing staff, also obtain registration as an employer under PT.
MSME Registration (Also known as Udyam or Udyog Aadhar): The MSME Act provides several benefits to micro, small and medium enterprises. The registration under MSME is Aadhar Based and easy to do. We recommend every eligible business register under the MSME
GST Registration: GST is a tax on the supply of goods and services and applies when turnover crosses Rs. 40 Lakh in case of goods and Rs. 20 Lakh in case of services. To comply with GST, registration is mandatory.
Intellectual Property Registration: The IP Rights are considered the most valuable business rights in modern times; the startups must take steps to safeguard their trademark, copyright, design and inventions by filing registration In India at the earliest.
Get Proprietorship Registration Guide,
Step Wise Process & Over All Cost.
Comparison of Proprietorship With One Person Company
| Feature ⇓ | Sole Proprietorship | One Person Company |
|---|---|---|
| Meaning | The word sole denotes single, and proprietorship is for the ownership. The sole proprietorship is the most common form of business for tiny business in India, where a single individual owns and controls it. | The OPC is a fusion of sole proprietorship and the corporate form of business. The Companies Act, 2013, for the first time, introduced the OPC to enable a single person to open a company with a simplified compliance regime. |
| Registration | No formal registration of sole proprietorship is required as there is no specific law of parliament or state that regulates the proprietorship business. That is why it is so simple to start and manage. | A one-person company is incorporated under the Companies Act, 2013. The process is simple and online. Only one person is required to start the OPC. |
| Distinct Legal Entity | A sole proprietorship firm is not a separate legal entity from that of its proprietor. The proprietor and the proprietorship is the same thing. | OPC is a separate legal entity, and the shareholder/director of the OPC are different from that of the OPC. |
| Liability | The proprietor is personally liable for all the liabilities and debts of the business. To pay off these liabilities, the personal properties of the proprietor can also be attached. | In an OPC the single shareholder is not liable for all the liabilities or debts of the company, and instead, he/she is responsible for paying only the sum which may be outstanding from her subscribed share capital. |
| Number of Members | A single Individual can start a Sole Proprietorship Firm, where he alone will invest all the capital and shall be entitled to all the profits of the firm. | The OPC can be owned by only one Individual, also known as the sole shareholder. However, the sole owner of the OPC has to nominate another person to become his or her nominee. |
| Minimum Capital | You can start the proprietorship firm with any amount of capital. It means there is no minimum or maximum capital prescribed as such for a proprietorship firm. | There is no prescribed minimum capital as such. It means you may incorporate an OPC with any capital as you desire. After the 2021 budget, there is no limit on maximum capital. |
| Succession | The proprietorship business lacks the benefit of perpetual succession. With the demise of the proprietor, the firm also ends its life. The proprietor and the proprietorships are one and the same. | The OPC is recognised as a separate legal entity in the eyes of the law and the business is transferred to the nominee after the demise of the proprietor. |
| Separate Property | As there is no distinction between the the owner (proprietorship) and the sole proprietorship firm as such, the firm can not own property or assets in its name. | An OPC being a separate legal entity is capable under the law to own the property in the name of one person company. |
Benefits of Proprietorship Form of Business
Start Business in One Day
Proprietorship formation is the easiest among all other business forms, and that you can start within one working day.
100% Online Process
We help small business to start their business in an entirely online environment and without any hassle.
Ease of Compliance
The compliance requirement is significantly less, and there is no need to get the accounts audited or file any annual return.
Ease of Compliance
The compliance requirement is significantly less, and there is no need to get the accounts audited or file any annual return.
Tax Advantage
As the taxable income forms part of the Proprietor's ITR, The benefit of slab based income tax is available to proprietorship.
Easy To Close
There is no specific process to close the proprietorship firm. Surrender all registration and licenses and close business.
Checklist on Minimum Requirements to Start Proprietorship
1
Indian Citizenship: The proprietorship business is available exclusively to the Citizens of India. The FDI is not allowed in it, hence to start a sole proprietorship we need Indian Citizen capable of entering into contracts (Above 18 Years of age)
2
Business Address: The business can not be run from a residential address as per local municipality laws, hence for GST Registration, the Goods and Services Tax Department insists on the commercial premises of premises where mixed land use is permitted.
3
Capital Requirement: The sole proprietorship business is not separate from the Individual Proprietor, and There is no separate recognition of the assets of the business or that of the proprietor. Hence you do not have to worry about capital requirements. Invest as per requirement.
4
New & Unique Name: The name of the proposed new business should be unique and eligible; we advise you to check the proposed name in the database of the trademarks before its adoption
Documents & Fee Required to Start a Proprietorship Firm
| A. DOCUMENTS OF THE OWNER | B. BUSINESS ADDRESS PROOF |
|---|---|
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After successful payment, please download the questionnaire, fill it and send it to us at help@digiindiaservices.com along with the list of documents for further process.
More Question? A specialist is here to help
Call us at: +917400359006 or Email us: info@digiindiaservices.com
Step-Wise Process to Start a Sole Proprietorship Business
Start your business as a proprietorship quickly within one day. The process begins with the online order at Digiindiaservices. Once the order for proprietorship setup is processed, we will initiate the documentation and further process. As said earlier, the process is entirely online, and there is no need for you to visit our office. Please do contact us for any clarification.
Step - 1:
Documentation
The process starts with documentation of the proprietor and the place of business where the firm shall carry out its business, ensuring that the documents are updated and correct. Please share the filled questionnaire and all documents at help@digiindiaservices.com, quoting your order details.
Step - 2:
Selection of a Unique Name
The first thing is to select a unique name for your proprietorship business. The starting point should be to search the business's proposed name in the trademark register to avoid infringement on someone else's trademark. Click here to learn more about the trademark.
Step - 3:
MSME - UDYOG Aadhar / Udyam
For opening a bank account, there is a need for two documents in the proprietorship name. One of the registrations could be Udyog Aadhar, enabling an entrepreneur to seek online services offered by Government Departments apart from various other benefits under the MSME Act. Click here to learn more on MSME.
Step - 4:
GST Registration
You may not supply goods or services all over India unless the proprietorship firm obtains GST Registration. However, if you are doing business only within the state, GST is not required until the turnover of Rs 40 lakh in case of Goods and Rs 20 Lakh in case of services is reached. Click here to learn more on GST Registration.
Step - 5:
Other Tax Registrations
Based on the business, the proprietorship firm may obtain TAN, IEC and PT Registration. The TAN is required to comply with TDS provisions; IEC Cose is necessary for import and export business. Some states impose a professional tax, and thus, PT enrollment and registration may be required.
Taxation of Sole Proprietorship
The proprietorship is not considered as a separate entity in law, and the income of the proprietorship firm is added in the ITR of the proprietor itself. In other words, no separate ITR is filed for the proprietorship firm. The Individual slab based taxation of 5% to 30% based on the income is applicable. The deduction under section 80C to U is also available on the income of such proprietor. For the FY 2021-22, the Individual tax rate slab is as under.
| Under New Income Tax Regime U/s 115 BAC | ||
|---|---|---|
| No | Total Income | Tax Rate |
| 1. | Upto Rs. 2,50,000 | NIL |
| 2. | Rs. 2,50,000 To Rs. 5,00,000 | 5% |
| 3. | Rs. 500001 to Rs. 7,50,000 | 10% |
| 4. | Rs. 7,50,001 to Rs. 10,00,000 | 15% |
| 5. | Rs. 10,00,001 to Rs. 12,50,000 | 20% |
| 6. | Rs. 12,50,001 to Rs. 15,00,000 | 25% |
| 7 | Above Rs. 15,00,001 | 30% |
| Under the old Income Tax Regime | ||
|---|---|---|
| No | Total Income | Tax Rate |
| 1. | Up to Rs. 2,50,000 | Nil |
| 2. | Rs. 2,50,000 To Rs. 5,00,000 | 5% |
| 3. | Rs. 5,00,000 to Rs. 10,00,000 | 20% |
| 4. | Above Rs. 10,00,001 | 30% |
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