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There are thousands of companies in India that are registered as sole proprietorship. However, only a few of them have bothered to make an entry in the register of companies. Now, there is nothing difficult about getting a company registered as a sole proprietorship. All you need to do is invest a few hundred dollars in preparation for the process and once it is over, you can become an entrepreneur with no formal qualification apart from ownership of your business.
What is a Proprietorship
A sole proprietorship company is a legal entity formed under the law of the country where it is organized. These companies are recognized as separate legal entities from their respective owners. Sole proprietorship means that the proprietor of a company owns only his voting equity interest in said company, and not any other economic interest whatsoever. Only after due registration and governance procedures can a sole proprietorship be deemed an “”operating company””, which means it is permitted to engage in commercial activity in the country where it is organized.
Types of Proprietorship
Sole proprietorship, also known as sole-proprietorship or limited liability company, is a type of legal structure that only individuals can form. Sole proprietorship businesses are limited in scope and function. Unlike a corporation, a sole proprietorship does not pay corporate income taxes and is not considered a business for federal income tax purposes. However, like any legal structure, there are certain regulations and requirements that must be followed in order to operate a sole proprietorship.
Proprietorship Registration Requirements
Every Indian MNC with annual turnover of over Rs. 50 crores has to file a 10-K IR35 form with the Ministry of Corporate Affairs every year. This is basically a Franchise Registration Certificate (FRCC) prescribed by the government to any entity that operates an business propositioning to consumers in India. Businesses using sole proprietorship (PPC) schemes are required to file these documents with the ministry every year even if they have zero or minimal employees. These documents have been used by various departments like Income Tax, Customs, Excise, service tax etc.
Documents Required For Proprietorship Registration
To register a sole proprietorship in India you need to submit the following documents: 1) documents proving you are the sole owner of the business, 2) a copy of your registered agent’s letterhead, 3) furnishing details of the place of business, nature of business activity and registered address along with copies of payments receipt sheets, 4) supporting documents to show that your business will be carrying on the said activity in India Such as
Proprietorship Registration Process
To register a company you need to provide certain documents and complete the application process. It involves providing information about your business, your founders and your property. The regulatory requirements for sole proprietorship in India are different than for a corporation. You should read up on them carefully before you begin the process.
How to register a Proprietorship
It is as simple as filling up the form and paying the fee. After that, you will get a verification email with a link to your company profile on the website of the Ministry of Corporate Affairs, India. The next time you want to start bringing contracts to your clients, whether they be individuals or companies, all you have to do is click on the link and follow the instructions.
Sole proprietorship is a type of business structure in which the owner(s) of a business or profession fulfills his or her financial obligations through the efforts of one or more individuals, partnerships, or corporations without co-ownership or involvement by another party. Sole proprietorship companies may be limited partnerships, sole proprietorships, or corporations organized under the laws of some states. Find out more here.
Advantages Of A Proprietorship
There are many advantages of registering a Sole Proprietorship company in India. The first and foremost advantage is that it gives you the ability to use limited financial resources for your business. If for some reason you cannot maintain your business on a day-to-day basis, having a limited financial reserve can help you weather difficult times. Having a second reserve also helps you maintain your privacy as well as protects you against unforeseen complications.
Disadvantages of a Proprietorship
If you are thinking of starting a sole proprietorship company in India, registration is mandatory. Starting a business without registration can bring heavy fines and even jail time. There are many reasons for why you might want to start your own company, but if you’re thinking about registering your company without doing proper research, keep reading. Here are the most common reasons for wanting to register a sole proprietorship company in India: