A Sole Proprietorship firm is a unique and the simplest way of doing Business. Proprietorship firm is owned by an Individual. Sole Proprietorships has the minimal regulatory compliance requirement. There is no Statutory Authority to register the Proprietorship Firm. The sole Proprietorship concern can start its business after obtaining the Udyam Registration or Trade Licence or Shop and Establishment Licence or GST Registration.
Under Proprietorship Concern, there is no separate PAN and the PAN of the proprietor is applicable. The Proprietor shall be personally liable for all acts.
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The Sole proprietorship firm is the simplest way of doing the business. The proprietorship firm need not to be register with any Statutory Authorities.
Proprietor is the sole owner of the Proprietorship Firm and hence the decision making in the proprietorship is very easy
A sole proprietorship firm can borrow money from the Banks/ NBFC after detailed due diligence and credit eligibility by the Financial Institutions.
There is no separate PAN of the proprietorship firm. All the registrations and Income tax return of the Proprietorship firm is obtained / filed with the PAN of the proprietor.
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A proprietorship trading firm is a business that is owned and run by an individual person. Under this the owner and the business are treated same. Proprietor is personally responsible for all business debts i.e. his personal property may also be used to repay business debts.
No, the proprietorship firm and the proprietor are one and the same legally. The PAN of the proprietor will also be the PAN of the firm. The assets and liabilities of the business and the proprietor will also be one and the same.
The name of the firm should not contain any words which indicate the support of the government unless the government has given its written consent for the use of such words. The name of the firm can be reserved by getting trade mark registration.
A business operated under a proprietor cannot be transferred to another person. Only the assets in the proprietorship can be transferred to another person through sale, but government approvals, registrations, etc., cannot be transferred to another person.
The business entities that are owned, managed and controlled by one person come are called Proprietorship firms, thus these firms cannot issue shares or have investors.
Yes, proprietorship business can be converted into a company or an LLP at a later date. But the procedures involved are cumbersome, expensive and time-consuming. Therefore, it is advisable for entrepreneurs to consider and start an LLP or a company in case they are expecting it to be operational at a bigger scale or they want to raise investment.
There is no limit on the minimum capital required to start a proprietorship.
The Reserve Bank of India has made it compulsory for proprietor that along with PAN, identity proof and address proof of the proprietor, two forms of registration of the proprietorship should also be provided. The two forms of registration can be any two of the following: MSME registration, Shop & Establishment Act registration, professional license, chartered accountant certificate or others as provided in the RBI KYC norms.
Proprietorship firms do not have a certificate of incorporation or a certificate of registration. The identity of a proprietorship firm is established by registering with the relevant or applicable Government authorities.
There is no registry or regulation for registering the name of a Proprietorship. Therefore, proprietorship firms can adopt any name that does not infringe on registered trademarks.
Annual tax return has to be filed by Proprietorship with the Income Tax department. However, annual reports or accounts need not be filed with the Ministry of Corporate Affairs which is required for an LLP or a company.
No, it is not necessary for proprietorship to prepare audited financial statements each year. However, a tax audit may be necessary based on turnover and other criteria.
