Proprietorship is the simplest and most common form of business structure. It is easy to set up and does not require any legal formalities, unlike other forms of business structures. It is also relatively inexpensive to start and maintain.
The proprietor is solely responsible for making all the business decisions, and is also personally liable for all the debts and obligations of the business.
Proprietorship is best suited for small businesses, such as retail shops, consulting firms, or home-based businesses, that do not require a large amount of capital to start.
Business Premises can either be owned or rented.
No minimum capital requirements (except a payment of a nominal fee to open a current account)
Starting a sole proprietorship is relatively simple and inexpensive & easy to close or dissolve if the business is not successful.
A sole proprietor has complete control over the business and can make decisions quickly and easily.
A sole proprietorship has less administrative and legal costs than other types of business structures.
To open a bank account for a proprietorship firm, you will need to choose a bank, gather required documents such as a valid government-issued ID, PAN card and proof of address of your business, complete the account application, provide proof of business such as registration certificate of proprietorship firm, GST registration certificate, and any other relevant licenses or permits, wait for account approval and then sign agreements and get cheque book.
In India, a shop act registration and Udyam Aadhaar certificate are not mandatory for a proprietorship firm. However, both these certificates are issued by the state government, and it is up to the state government to decide if they want to make these certificates mandatory or not.
A Shop Act registration is typically required for businesses that operate retail shops, restaurants, and other similar establishments.
Udyam Aadhaar certificate, also known as Udyog Aadhaar, is issued by the Ministry of Micro, Small, and Medium Enterprises. It serves as a self-declaration of the MSME status of an enterprise.
Shop Act registration is mandatory for proprietorship firms operating in Maharashtra and Udyam Aadhaar certificate is optional, but it can be beneficial for proprietorship firm to have it for availing the benefits provided by the government.
GST registration is mandatory for a sole proprietorship business in India, if the annual turnover exceeds the threshold limit or if it engage in inter-state trade or commerce, even if the turnover falls below the threshold limit, it is still required to file regular GST returns and pay GST on time.
In India, the threshold limit for GST registration for a sole proprietorship is Rs. 40 Lakhs for states other than Special category states and Rs. 20 Lakhs for Special category states such as North Eastern states, hilly states and Union territories.
Yes, it is possible to convert a proprietorship into a company or LLP in India by following the steps of obtaining DIN and DSC, obtaining a name clearance certificate, filing for incorporation, obtaining certificate of incorporation, obtaining PAN and TAN, transferring assets and liabilities and obtaining any other licenses and permits required for the business.
Yes, sole proprietorship businesses can be enrolled with e-marketplaces like Amazon and Flipkart. These e-marketplaces typically have a registration process for sellers, which includes providing information such as business details, product information, and tax registration documents. Once the registration process is completed, the sole proprietor can start listing and selling products on the marketplace.
Yes, a person can be a proprietor of a sole proprietorship and a director of another company.
