How to Register Sole Proprietorship Firm in India

Steps for register sole proprietorship firm in india for Startups

Key Features of Proprietorship Firm

• 1 Person Required as Single Entrepreneur.
• Single Owner of the Business.
• Easy to Start and Easy to Close.
• Complete Control.
• Lower Cost of Formation and Compliance.

Disadvantages of Proprietorship Firm

• Lack of Resources.
• Unlimited Liability.
• Lack of Credibility.
• Can not raise funds easily.
• Can not add Partners.

As a sole proprietor, main objective of the firm is opening a current bank account on the name of business. so basically most of the banks ask for any legal certification for the business.

So as per convenience of the readers we can divide business as 2 Categories.

a) Services Based Business   b) Product/Manufacturing/Sales Business

a) Service Based Business -
These type Business are providing services Online and Offline to users. Example are - Website Development/Digital Marketing/Consulting/ECommerce Marketplace/Marketplace Business Models/Tickets and Hotel Bookings/Classifieds Websites or any other type of business which providing the services.

so as a Service Based  Business mainly need 2 thing open a current account.

• Service Tax Certification
• MSME Certification or Chartered Accountant Certification regarding nature of business. (Required by some private banks)

Note :- Service Tax Registration Certification not means that you have to charge the service tax from starting. For the Clarification just place a request here with your Queries 

Must Read : How to Apply for Service Tax Registration

b) Product/Manufacturing/Sales Business - 
These type Business are selling any product to customers through own website or offline. They are selling VAT applicable products to consumer so these type startups fall in this category.
Example are- ECommerce Website/Importer/Exporter/Selling on ECommerce Marketplace i.e Flipkart/Snapdeal or offline trading business.

so as a Product or Sales category business needs anyone minimum two things -

• Shop Act License ( In the Maharashtra or Gujarat its called Gumasta and in WB State its called Trade License)
• MSME Certification
• CA Certification
• VAT/Sales TAX/TIN Registration.

Note - In the starting you can apply for the MSME + CA Certification or Shop act license to save the expenses on the VAT/CST. for the Clarification fill up below request form with your Queries.

VAT Registration is State wise so it's Procedure very state to state.

Common Documents Required in Both above cases register as Proprietorship Firm :-

• ID and Address Proof as Pan Card/Passport/Voter ID/Aadhar Card/Driving License Copy of the Proprietor.
• One Business Place Address proof :- 

1. if Property on Rented :- Need Rent Agreement and NOC from Landlord.
2. if Property is own :- Need Electricity Bills or any other Address Proof.

Note : Proprietor Business place and home place can be same

• For VAT : - Needed Security Amount as Fixed Deposit or needed minimum two  surety of dealer which already registered in that state VAT Registration.

Note : In Some State Security Amount or Surety is not applicable like in Delhi but in Most of the State its applicable and FD Amount or Guaranteed Amount Very as State wise Rules and Regulations.

How to Register Proprietorship Firm Online ?

a) For the Service Tax Registration or MSME or CA Certification we highly recommend MyOnlineCA Which registered more than 100+ Firms in a month Online through our platform. you can Checkout their Reviews here on Facebook where many Small firms give their feedback on the online registration.

b) For the VAT/CS Registration or Shop Act License in some state user can apply online but again problem is  there is complex online procedure and during the verification officers takes the bribe or raise the issues. so so we recommend take the help from a expert.

We also Recommend to Watch this Video in Hindi where you got the idea about the How to Register a Sole Proprietorship Firm in India.