Know about Proprietorship Firm in India

A proprietorship firm means the firm is no different than its proprietor, i.e, the owner. It is not a company so to say and it is not necessary for a proprietorship firm to be registered under Companies Act or Establishment Act. As the sole proprietor of the firm, the first thing that has to be done is opening a current bank account in the firm’s name. The firm can be a service provider or a product provider and on the basis of their category they need the following documents to run their firm: Service Based Business These firms provide chargeable services to its customers either offline or online.
  • Service Tax Certification:
When a person commences a new business, it is obligatory for him/her to obtain service tax registration within 30 days of commencement, if the business will have taxable service in excess of Rs.9 lakhs. Moreover, some banks deny opening a current bank account without Service Tax certification.
  • Chartered Accountant Certification regarding nature of business. (Required by some private banks)
Product/Manufacturing/Sales Business These firms sell VAT applicable products to its customers via its online or offline portal.
  • Shop Act License ( In Maharashtra or Gujarat it is called Gumasta and in West Bengal, it is called Trade License)
  • VAT/Sales TAX/TIN Registration.
Common Documents required in both above cases to register as a Proprietorship Firm:-
  • ID and Address Proof in the form of Pan Card/Passport/Voter ID/Aadhar Card/Driving License Copy of the Proprietor.
  • Either of the one Business Place Address proof:-
  1. If Property on Rented: Need Rent Agreement and No Objection Certificate from Landlord.
  2. If Property is owned: Need Electricity Bills or any other Address Proof.
  3. For Value Added Tax: - Security Amount as Fixed Deposit or minimum two surety of dealers who are already registered in that state VAT Registration.
Parmeet Chhabra, a skilled content writer and editor at LegalRaasta since 2020, with a writing journey of over 5 years, specializes in crafting informative web pages and blogs over diverse domains like education, legal laws, government licences, web development, etc.

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