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Proprietorship Firm Registration Consultants in Dharwad
MS Legal Associates:
Income and losses are taxed on the individual's personal income tax return. The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts.
A sole proprietorship is a business that is owned, managed and controlled by one person. It is one of the most common forms of business in India, used by small businesses operating in the unorganized sectors. Proprietorships are very easy to start and have very minimal regulatory compliance requirement for getting started. However, after the startup phase, proprietorship's do not offer the promoter a host of other benefits such as limited liability, separate legal entity, independent existence, transferability, etc., which are desirable features for any business. Therefore, proprietorship's are suited for unorganized, small businesses that will have a limited existence.
The sole proprietorship is a popular business form due to its simplicity, ease of setup, and nominal cost. A sole proprietor need only register his or her name and secure local licenses, and the sole proprietor is ready for business. A distinct disadvantage, however, is that the owner of a sole proprietorship remains personally liable for all the business's debts. So, if a sole proprietor business runs into financial trouble, creditors can bring lawsuits against the business owner. If such suits are successful, the owner will have to pay the business debts with his or her own money.
The owner of a sole proprietorship typically signs contracts in his or her own name, because the sole proprietorship has no separate identity under the law. The sole proprietor owner will typically have customers write checks in the owner's name, even if the business uses a fictitious name. Sole proprietor owners can, and often do, commingle personal and business property and funds, something that partnerships, LLCs and corporations cannot do. Sole proprietorships often have their bank accounts in the name of the owner. Sole proprietors need not observe formalities such as voting and meetings associated with the more complex business forms. Sole proprietorships can bring lawsuits (and can be sued) using the name of the sole proprietor owner. Many businesses begin as sole proprietorships and graduate to more complex business forms as the business develops.
To start a sole proprietorship in India, all you need is a bank account. Go to a bank, open a bank account in the name of the company that you wish to operate in - and you are on. Manage your taxes in the manner that you manage your own.
Once you get to a certain level, you will have get certain things registered etc. But to start with - just a bank account and you can start operating. Nothing else needed!
If you want to start a new online or offline business, sole proprietorship is the best option for you. A sole proprietorship is an unincorporated business owned by one person. The owner of a sole proprietorship is known as a sole proprietor. You can start it the day you want it. When your business grows you can then turn it into an LLP or a Company.
How to open a current bank account for my proprietorship
If you want to open a current bank account under your trade name "ABC Consultants" you will need couple of things
1) Service tax registration or Sales Tax or VAT registration or Shop Establishment license.
Note For consultancy you need just service tax regd but for selling goods you will have to go for sales/vat/ regd and shop license
2) Letter from your CA regarding the nature of your business.
3) Letterhead with the firm's name and address.
4) Stamp in the name of the Proprietorship.
5) Address and ID Proof of the proprietor. If proprietorship address is different then you will also need office premise address proof.
Key Features of Proprietorship Firm
1 Person Required as Single Entrepreneur.
Single Owner of the Business.
Easy to Start and Easy to Close.
Lower Cost of Formation and Compliance.
Disadvantages of Proprietorship Firm
Lack of Resources.
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.