Key Features of Proprietorship Firm
Disadvantages of Proprietorship Firm
These type Business are providing services Online and Offline to users.
- Service Based Business –
Example are – Website Development/Digital Marketing/Consulting/ECommerce Marketplace/Marketplace Business Models/Tickets and Hotel Bookings/Classifieds Websites.
So Service Based Business have to take following action to register under the Sole Proprietorship Registration :-
a) Apply for the Service Tax Registration.
b) Open a current bank account on the basis of Service tax Registration Certificate.
Note : Service tax Registration Certification is need after the 9 lac Rupees turnover limit but in the case of sole proprietorship firm banks always ask for a legal proof so you have to show service tax Registration Certificate or any other local registration like Shop Act License so we always recommend for the Service tax registration certificate.
2. Product Based Business –
These type Business are selling any product to customers through a website or offline. They are selling as Reseller or like a Manufacturer (VAT applicable products) to the consumer.Example are- ECommerce Website/Importer/Exporter/Selling on ECommerce Marketplace i.e Flipkart/Snapdeal.
So Product Based Business you have to take following actions :-
a) Apply for the VAT/CST Registration from your State Government.
b) Open a current bank account on the basis of VAT/CST Registration Certificate.
- Identity Proof of Proprietor
- 3 Photographs of Proprietor
- Address Proof of Proprietor
- Address Proof of Proprietorship
- if self owned then copy of Electricity Bill / Property Tax Receipt / Sale Deed
- if rented then NOC from Landlord, Rent Agreement, Electricity Bill / Property Tax Receipt / Sale Deed of Landlord
- Cancelled Cheque
- List of Goods to be dealt in along with goods required for packing, if any
Registrations required as per other statute:-
Registration under Shops and Establishment Act: This is state specific requirement, in some states it is mandatory and in some it is optional, for example in the Delhi NCT it is optional.
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.
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 Registration : This is a tax on Sale of goods between the states, which is governed by the central sales tax act
Service Tax Registration: This is a tax on the services provided by the proprietor apart from the negative list of service.
Import Export Code: This is also known as IEC, and is pre-requisite before the proprietorship ventures in to any import or export
Trade Mark Registration : Brand Name, Logo, Slogan, Label etc.; are intellectual properties which acquires value over a period of time and it is advisable to protect them under as trade mark
Provident Fund Registration: The moment number of employees exceeds 20 the proprietor is required to get itself registered with the regional office of the Provident Funds Organization. The contribution rate is 12% each from employee as well as employer
Employee State Insurance Corporation (ESIC) Registration: Every organization including the proprietorship concerns employing more than 10 employees having salary more than 15000/- is required to get themselves registered with the concerned Regional office of the ESIC, the contribution to the ESIC is 6.5% wherein 4.75% is contributed by the employer and 1.75% is to be contributed by the employee
Other Need Based Registration: The firm may be required to get themselves registered into various other departments like excise, customs, SSI etc.
PROPRIETORSHIP FIRM REGISTRATION
Cost of Service for Proprietorship Registration: