Common Identity: It has no separate legal entity independent of the owner.

Capital: The capital is provided by the proprietor himself from his personal resources.

No Special Legislation: Proprietorship Firm is not governed by any special legislation.

Non-transferable nature: A sole proprietorship has a character of non-transferability.

Liability to file Income Tax Returns: It is an obligation of the proprietor to file Income Tax Returns relating to the sole proprietorship business annually.

No restriction on number of Sole proprietorship firms: An individual may be the owner of more than one proprietorship firms having different businesses.

Profits and Losses: The surplus arising in the business of the sole proprietorship entirely belongs to the proprietor and all the losses and risk are to be borne by him alone.

Single Ownership: It can consist of maximum one member which means single ownership. It runs entirely at own risk of loss and provides both capital and management to the business.

Unlimited Liability: The proprietor has unlimited liability for the debts incurred in the business. The creditors have right to recover their dues from the personal property in case the business assets are not enough to pay their debts.

• Incorporating this type of proprietorship gives less economic burden
• Proprietorship businesses are not bound to pay corporate taxes
• No need of obtaining separate PAN for proprietorship firm
• Lesser compliances than other type of entities
• Closure of proprietorship requires minimum formalities
• One person has decision making authority and liability to control the business along with incurred profit and loss
• No registration or reservation of business name is required to start a proprietorship

• A person is personally liable for all losses in the business
• Ceases to exist with the death of the Sole Proprietor due to non-transferability
• No special legislation and less formalities mean less government support during hard times.
• Raising funds is a challenge as a single person has liability for all the investments and other financial responsibilities

STEP 1: Obtaining a PAN is the first and foremost requirement for registration. If you do not have PAN, we will get one for you.

STEP 2: Select an appropriate name for the business. The name of an entity should be unique and selected in such a way that it clearly defines the purpose of the business. However, no name approval is required from any Government authority, though it is important that the selected name must not be common and not reflect or represent any other business.

STEP 3: Opening of a current bank account and register the entity. A proprietor needs to open a current bank account in the name of the entity. A proprietor can take other government license along with the registration as per the legal requirement of the business.

STEP 4: Registration under MSME It is not compulsory to get registered under the Micro, Small and Medium Enterprises Development Act, 2006 but this can help to take benefits from the government schemes for the proprietorship.

STEP 5: GST registration is important if the turnover of the business exceeds the maximum announced limits of the respective state (in which the business is established).

These licenses can help (as per the requirement) in smooth running of business with less government interference:

• MSME Registration
• GST Registration
• Shop and Establishment Act Registration
• TAN Registration
• Import Export Code License
• FSSAI License

Income Tax Returns: Income Tax required to be filed yearly for the proprietorship.

TDS Returns: If income tax audit is applicable on the proprietorship firm, the TDS Returns have to be filed every quarter and TDS payment to be done every month.

GST: GST Registration is mandatory if the turnover exceeds Rs 20 lakhs and also if you are selling your goods/ services to other states, either through e-commerce or directly. GST returns are to be filed every month (although there is a quarterly filing option if the turnover is below Rs 1.5 crores). But GST collected has to be deposited every month.