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Posted on April 27, 2021
A sole proprietorship is one of themost established and most basic type of business in India. Proprietorships are business substances that are possessed, overseen and controlled by one individual. Proprietorships are anything but difficult to begin and have exceptionally negligible administrative consistence prerequisites. Be that as it may, proprietorship’s don’t offer the proprietor/proprietorix a large group of different advantages, for example, constrained risk, autonomous presence, transfer ability, and so forth., which different sorts of business substances like LLP and Private Limited Company do. In this article we take a gander at the procedures encompassing the beginning up of a proprietorship.
Beginning a sole proprietorship requires no lawful conventions or enrollment. Be that as it may, business licenses as required by State/Central Government and duty enrollments must be acquired. Further, incase the name of the business is remarkable or brandable, a trademark enlistment is prescribed.
Business licenses are an unquestionable requirement for any business, regardless of the kind of business substance. For instance, on the off chance that you are a Doctor, you would require a License to Practice from the State/Central Government; likewise, an eatery would require a Food Business Operator License from Food Safety Standards Authority of India. Hence, it is essential to comprehend the administrative structure encompassing the movement you wish to embrace in the proprietorship and acquire the pertinent licenses from the separate Local, State and Central Governmental/Statutory powers.
Some examples of business licenses include:
- Food Business Operator License – Required for businesses handling food
- Customs Broker License – Required to act as Customs Broker
- Security Agency License – Required to provide security services
- Shop & Establishment License – Required while operating shops and commercial establishments
In light of the kind of movement to be performed by the Proprietorship, charge enlistments must be acquired from the significant duty powers. A percentage of the assessment enlistments that would be required for a proprietorship include:
- GST Registration – Required for selling goods/products
- Professional Tax Registration – Required for businesses employing Professionals
- ESI/PF Registration – Required for most businesses having employees
There is no Registrar or Registry for Proprietorships in India. Along these lines, a proprietorship can more often than not be worked under any name, the length of it doesn’t struggle with any trademark enlistments and/or is not in strife with different guidelines and regulations. Consequently, on the off chance that you propose to contribute noteworthy measure of time and cash in the proprietorship, or if your business name must be utilized solely to recognize products and administrations beginning from your business; then it is prescribed that you get trademark enrollment.
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Opening a Bank Account:
Opening a financial balance for the sake of the proprietorship firm is one of the initial steps in the wake of opening a proprietorship, to open a ledger for the sake of the proprietorship, two of the accompanying archives are required according to RBI’s Know Your Customer (KYC) standards:
- Certificate / license issued by the Municipal authorities under Shop & Establishment Act,
- Sales and income tax returns
- CST / VAT certificate
- Certificate / registration document issued by Sales Tax / Service Tax / Professional Tax authorities
- Registration / licensing document issued in the name of the proprietary concern by the Central Government or State Government Authority / Department.
- IEC (Importer Exporter Code) issued to the proprietary concern by the office of DGFT as an identity document for opening of bank account.
- License issued by the Registering authority like Certificate of Practice issued by Institute of Chartered Accountants of India, Institute of Cost Accountants of India, Institute of Company Secretaries of India, Indian Medical Council, Food and Drug Control Authorities, etc.