Proprietorship Firm

A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of business entity that is owned and run by one natural person and in which there is no legal distinction between the owner and the business.

Advantage Full ownership and control. Less capital involved. Profits are not to be distributed. Ease of formation. Complete control over all the aspects of the business. Strong Interpersonal relationships with clients, customers, and employees.

Dis-Advantage Owner alone bears the losses. limited availability of funds. Unlimited liability of owner.

Applicability of Registration

Since the proprietorship is itself not distinguishable from its owner hence there is no registration or approval is required to start a proprietorship business in India. However, Registrations required as per another statute.

Registration under Shops and Establishment Act

This is a state specific requirement, in some states it is mandatory and in some, it is optional, for example in the Delhi NCT it is optional.

Sales Tax (VAT) Registration

This is a tax on sale of goods within the state which is governed by the respective vat act of the state.

Central Sales Tax (CST) Registration

This is a tax on Sale of goods between the states, which is governed by the central sales tax act

Local Municipality Registration

This kinds of registration is mandated by some of the municipalities and applies to the firms operating in the territorial jurisdiction of the municipality.

Service Tax Registration

This is a tax on the services provided by the proprietor apart from the negative list of service.

Other Need Based Registration

Import -Export Code (IEC), Trade Mark Registration, Provident Fund Registration (PF), Employee State Insurance Corporation (ESIC) Registration, Excise, Customs, SSI etc.