Proprietorship Firm Registration in Bangalore

  • It’s the basic type of business which is owned and operated by a Sole Proprietor.
  • Its mostly popular in case of unorganised form such as merchants and small traders.
  • It has minimum compliance and takes less time to set-up.
  • The business is taxed in the name of the Proprietor, using personal PAN.
  • The set-up costs lesser than other forms of entities.

Important points to be noted

  • Restrictive investment. Non-Resident Indians and Persons of Indian Origin can invest only with Prior approval of the Reserve Bank of India.
  • Very Limited Tax benefits, as the business is taxable on the person’s PAN.
  • Unlimited liability and personal assets are attached to settle liabilities.

List of Documents required

  1. PAN copy
  2. Identity Proof
  3. Address Proof of the Proprietor.
Types of Registration

The Proprietor can choose from multiple options as a form of registration to suit his business requirement and local Governance requirement. Some Common types are;

GST registration, Trade License, Shops & Establishment registration, MSME Registration, Professional License, Drug License, Trademark Registration Certificate, Certificate Issued by SEZ (Special Economic Zone), STP (Software Technology Park), EHTP (Electronic Hardware Technology park), DTA (Domestic Tariff Area) and EPZ (Export Processing Zone) in the name of the entity mentioning the address allotted, Importer–Exporter Code Certificate along with PAN Card (if PAN is quoted on the IEC Certificate), Certificate/License issued by Indian Medical Council, License issued by Food and Drug Control Authorities, Factory Registration Certificate in the name of entity etc.

Frequently Asked Questions

1. Legal Requirements to set up Proprietorship

The Person must be an Indian Citizen and a Resident of India. Non-Resident Indians and Persons of Indian Origin can invest only with Prior approval of the Reserve Bank of India.

2. Capital Requirement

No specific limit on the minimum capital for starting the business.

3. Legal Status of the Proprietorship Firm

The business does not have a separate legal status. The PAN of the proprietor shall be used as the PAN of the business and be taxable in the same capacity. The assets and liabilities of the business and person shall be treated as same.

4. Name of the Sole Proprietorship business

  • There is no registry or regulation for registering the name of the Proprietorship business. Hence, any name can be adopted that does not infringe on registered trademarks. To protect the rights on the name of the business, one can choose to get the trademark registered.

5. Compliance requirement

  • Income Tax filing in the name of the business has to be filed every year

6. Conversion of Proprietorship into LLP or Company

  • It can be converted. All the assets and liabilities of the sole proprietorship firm must be transferred to the private limited company.