Startup-Proprietorship in Bombuflat

Overview

If you are planning to start a proprietorship firm then you have come to the right place. Know the procedure for the same.

What is Proprietorship?

A sole proprietorship is the simplest way to start a business in India. It is owned and run by one person. This individual assumes full control of the business. The administrative burden is minimal. However, there are drawbacks. There is no opportunity for partnerships and no protection for personal assets in case of business issues. This structure is most suitable for very small businesses with fewer than five employees.

Benefit

The benefits of Proprietorship are as follows:

• Easy Registration:

A sole proprietorship is easy to start because it doesn't involve formal paperwork. However, some licenses might be needed to follow the rules.

• Lower Compliance:

Compared to other types of businesses, sole proprietorships have fewer rules to follow.

• Simplicity:

It is simple because there are no partners or directors. Small businesses work well with this structure.

• Decision Making:

The owner makes all the decisions without needing approval from others.

• Complete Control:

The owner has total control over everything in the business, like money, assets, and operations.

• Tax Benefits:

Sole proprietors often enjoy tax advantages, such as the ability to deduct business expenses from their personal income, potentially reducing their overall tax liability.

• Tax Liability:

The way a company is legally structured affects how it is taxed. A sole proprietorship is taxed like an individual.

Tax & Process

Income Tax Filing: Proprietors must file personal income tax returns using forms ITR-3 or ITR-4.

Business Income: Declarations of business income are only allowed through ITR-3 and ITR-4 forms, making them necessary for all proprietorships to maintain tax compliance.

GST Return Filing: If a proprietorship is registered for GST, monthly or quarterly GST returns must be filed according to the chosen scheme.

TDS Returns: Proprietorships with employees or significant purchases must deduct taxes at source and submit TDS returns every quarter.

Additional Compliance: Depending on their industry and location, proprietorships may be subject to various other compliance requirements.

Stay Compliant: Proprietorships must adhere to these tax regulations.

Documents Required

The following documents are required:

• An Aadhar Card is required for registration
• The Pan Card of the owner is required for registration
• The photograph is also a must for the registration/
• Utility bill of the business place such as water bill or electricity bill
• Bank statement copy and other details such as account number and IFSC code
• Applicants can avail of GST registration by submitting relevant e-application on the GST portal.
• Any other document that is requested needs to be furnished.

Procedure

Step 1: Apply for the Adhar card. Apply for a PAN card if you don't have one. If you already have a PAN card, proceed to the next steps.

Step2: Choose a name for your sole proprietorship business

Step 3: Open a bank account in the business's name. All business transactions should go through this account.

Step 4: Basic Registrations for Sole Proprietorship have to be followed

Step 5: Although specific registration isn't mandatory, some essential registrations are required for a sole proprietorship:

FAQ's