Sole-proprietorship Firm is a very common form of doing business in India or any ware else. This is very traditional mode of business and very commonly and widely used in the world.
One Individual can come forward and start this business model in no time with some simple registrations like Trade License, Shops & Establishments License etc.
Sole-proprietor may also need to get GST Registration, IEC License, PF Registration, IEC Registration etc if they are applicable to his / her business. Normally these licenses are applicable based on number of Employees and turnover of the Sole-proprietorship Firm.
Sole-proprietor has to use his / her own PAN Number as the PAN for the Sole-proprietorship Firm also. That means one need not / can not apply PAN in the name of the Sole-proprietorship Firm.
However, Sole-proprietorship Firm may need to be converted as Partnership Firm or Private Limited Company or Limited Liability Partnership firm based on the future requirements of the business or the owner(s).
Frequently Ask Questions (FAQs)
1. How many individuals are required to start a Proprietorship Firm Registration?
Ans: Only one Individual
2. What is the PAN of the Proprietorship Firm ?
Ans: Proprietor shall use his PAN as PAN of the Proprietorship Firm
3. What are the applicable tax rates for the Proprietorship Firm ?
Ans: Tax Rates that are applicable to Individuals are applicable to Firm also. No separate tax rates for Proprietorship Firm.
4. Which is better Partnership Firm or Proprietorship Firm ?
Ans: That depends up on factors like Control & Investment of the Business. If you want 100% control of the business in your hand and less capital is sufficient to the business then choose Proprietorship Firm. But if you need more capital and more partners / people to manage business, then go for Partnership Firm.
5. Is Proprietorship Firm registration is mandatory ?
Ans: No, but other Licenses / Registrations like GST, PF, IEC, MSME etc may be required based on you business and number of employees.
6. What is the difference between Proprietorship Firm and Sole Proprietorship Firm ?
Ans: Both are one and the same
Registration of a Private Limited Company or getting IEC License / MSME Registration is not just completed task, in fact it is a beginning task from then you are supposed to comply with much legal compliance which are may be monthly, quarterly, biannually or annually or event based on the specific nature of the task. Therefore we request you take informed decisions regarding all of this being in touch with us from time to time. Users of this portal shall also refer The Information Technology Act, 2000 and The Companies Act, 2013, Partnership Act, GST Act, Income Tax Act etc which are generally Applicable to most of the businesses in India.
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