Proprietorship Firm Registration Procedure
The Proprietorship Firm Registration which is also called a Sole Proprietorship Firm which is register under the Indian Proprietorship Act 1908. We require the following document to form a proprietorship firm .
Benefits at the time taking Contracts from Govt. or other Agencies Identification of the PROP. of the Firm.
Benefit in taking Legal Action
Document Requirements for
Proprietorship Firm Registration
- Prop. Name
- Father’s Name
- Residence Address
- Proposed Firm Name and Firm Address
- Two Photos of the Proprietor
- Objects of the Business
- One ID proof – (Voter ID,DL or Passport)
- One electricity bill or water bill of office premises.
- NOC from the landlord of the premises.
- Rent agreement
- Please also give us the date of commencement of business
- In case of sole proprietorship, please attach an affidavit attested by notary public.
- Letter Head & Rubber Stamp (Address & Prop.)
However, to open a bank account in the name of the firm, a minimum of 2 registrations such as Shops & Establishments, Professional Tax, Service Tax, MSME, etc. under the local, state or central authority is mandatory to comply with the Know Your (KYC) norms of the bank.
Note:For the sole proprietorship firms, the most relevant and competent Act in India, is the Shops and Establishments Act, of the concerned State. For such a firm, there is no requirement of opening a separate bank account, or making the business PAN Card. All income tax related issues would be solved on the basis of the income of the proprietor and his income tax returns. However, VAT or Service tax registrations are mandatory.
Important Question & Answer About Proprietorship Firm Registration
Q.What capital is required to start a Proprietorship?
Ans. A proprietorship can be started with any amount of minimum capital.
Q.Who can be a Proprietor?
Ans.The Proprietor must be an Indian citizen and a Resident of India.
Q.Will Proprietorship Firm have Certificate of Incorporation?
Ans.Proprietorship firms do not have a Certificate of Incorporation.
Q.How can I transfer my Proprietorship?
Ans.A business operated by proprietorship firm cannot be transferred to another person, unlike a Limited Liability Proprietorship or a Private Limited Company. Only the assets in the Proprietorship can be transferred to another person through sale. Intangible assets like Government approvals, registrations, etc. cannot be transferred to another person.
Q.Can other people invest in a Proprietorship?
Ans.Proprietorship firms are business entity that are owned, managed and controlled by one person. So Proprietorship firms cannot issue shares or have investors.
Q.Do I need one person to start a Proprietorship?
Ans.Yes, only one person is required to start a Proprietorship and a Proprietorship can have only one promoter.
Does the proprietor have to be an Indian to start a Proprietorship firm?
The Proprietor must be an Indian citizen and a Resident of India. Non-Resident Indians and Persons of Indian Origin can only invest in a Proprietorship with prior approval of the Government of India.
Q.How to open a bank current account for a Proprietorship?
Ans.To open a bank account for a Proprietorship, Reserve Bank of India mandates that the proprietor provide two forms of registration for the Proprietorship along with the PAN Card, identity proof and address proof of the Proprietor. The two forms of registration can be any two of the following: service tax registration, MSME registration, VAT/TIN/CST registration, shop & establishment Act registration, Professional license, Chartered Accountant certificate or others as provided in the RBI Know Your Customer norms.
Q.Will my Proprietorship firm have a separate legal identity?
Ans.The PAN card of the Proprietorship as well as the Proprietor is the same. Hence, the firm will not have a separate legal identity. The assets and liabilities for the proprietor and the proprietorship is the same.