Obtaining UDYAM Registration for Proprietorship

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Udyam Registration can be obtained online to avail various benefits available for small and medium sized businesses. Once the GST registration is obtained, the IndiaFilings team would help obtain UDYAM registration by submitting Aadhaar card, PAN card and GST certificate to Government.

Bank Account for Proprietorship

The bank current account for a proprietorship will be opened in the name of the business owner using his/her PAN. The business owner will have to submit proof for doing business. Any two of the following documents can be submitted to create a current account instead of savings account in the name of proprietorship:

GST registration certificate
Shop & Establishment Act license
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,
Banks may also accept IEC (Importer Exporter Code) issued to the proprietary concern by the office of DGFT as an identity document for opening a bank account etc.

Obtaining Shops & Establishment Act License for Proprietorship

From state to state, the process for acquiring a Shop and Establishment registration certificate changes. It is available both online and offline. In most states, Shop and Establishment Act registration can be obtained within 2-3 weeks. IndiaFilings helps you simplify the process of how to register proprietorship firm.

Timelines for Sole Proprietorship Firm Registration

A sole proprietorship firm registration can normally be done in India through IndiaFilings in less than 15 days. However, the timelines for registration will vary from case to case, depending on the government and bank processing timelines.

Proprietorship Business Activities

A proprietorship can undertake any type of business activity that an Indian person can undertake across most sectors and industries. However, there are some activities like banking, insurance, financial services, lending, defence, and telecommunication that require specialized approval. In such cases, a company is mandatorily required to obtain various approvals from the Government. Hence, the proprietorship business structure only works for business activities that are small-scale in nature. This might be one of the limitations of the proprietorship firm registration.

Compliances for Proprietorship

The following are some of the compliances that are applicable for a sole proprietorship registration:

Income Tax Filing: The business owner of a proprietorship will have to file a personal income tax return using the form ITR-3 or ITR-4.

Business Income: Only income tax forms ITR-3 and ITR-4 allow for declaring business income. Hence, all proprietorships will have to file form ITR-3 or ITR-4 to be compliant with the income tax regulations.

GST Return Filing: If a proprietorship has GST registration, GST return must be filed every month and quarter as per the scheme under which the business is registered.

TDS Returns: In case the proprietorship is having employees or purchasing goods/services beyond a certain threshold – tax must be deducted at source and TDS returns must be filed every quarter.

In addition to the above, various other compliance requirements maybe applicable to the proprietorship based on industry and location.

Proprietorship vs Limited Liability Partnership (LLP) vs Company

Features	Proprietorship	Partnership	LLP	Company
Definition	Unregistered type of business entity managed by one single person	A formal agreement between two or more parties to manage and operate a business	A Limited Liability Partnership is a hybrid combination having features similar to a partnership firm and liabilities similar to a company.	Registered type of entity with limited liability to the owners and shareholders
Ownership	Sole Ownership	Min 2 PartnersMax 50 Partners	Designated Partners	Min 2 DirectorsMin 2 ShareholdersMax 15 DirectorsMax 200 ShareholdersFor One Person Company1 Director1 Nominee Director
Registration Time	7-9 working days
Promoter Liability	Unlimited Liability		Limited Liability
Documentation	MSME GST Registration	Partnership Deed	LLP DeedIncorporation Certificate	MOA AOA Incorporation Certificate
Governance	–	Under Partnership Act	LLP Act, 2008	Under Companies Act,2013
Transferability	Non Transferable	Transferable if registered under ROF	Transferable
Compliance Requirements	Income tax filing if turnover is more than Rs.2.5 lakhs	ITR 5	Form 11 Form 8 ITR 5	ITR 6 MCA filing Auditor’sappointment Know More

Documents Required For Proprietorship

PAN Card

PAN card of the Proprietor.

Aadhaar Card

Aadhaar card of the Proprietor.

Proprietorship FAQ’s

What is meant by proprietorship firm?

A proprietorship firm is a type of business structure where a single individual owns and manages the entire business. The proprietor is personally liable for all the debts and obligations of the firm. Proprietorship firms are easy to set up and operate, making them a popular choice for small businesses and startups in India.

What are the types of proprietorship?

There are mainly four types of proprietorship in India:

Sole Proprietorship
One Person Company (OPC)
Registered Proprietorship
Unregistered Proprietorship

Each type of proprietorship has its advantages and disadvantages, and the choice of business structure depends on the proprietor’s needs, goals, and resources.

What is the difference between proprietorship and firm?

Proprietorship and firm are often used interchangeably, but there is a subtle difference between the two. Proprietorship refers to a type of business structure where a single individual owns and manages the entire business, while a firm refers to a group of individuals who come together to carry out a business activity. In a firm, the ownership is shared among the partners, and the profits and losses are also shared among them. In contrast, in proprietorship, the proprietor has complete control over the business, and all the profits and losses belong to the proprietor alone.

How to register proprietorship firm?

To register a proprietorship firm in India, you need to choose a business name and obtain the necessary registrations based on your business activities. While there is no formal registration required for a proprietorship, you should obtain a GST registration if turnover exceeds the threshold limit or if dealing in inter-state trade.

Are there any compliances for the sole proprietorship?

As the sole proprietorship and the proprietor are the same the individual has to just file the Income-tax returns and GST returns filing for the proprietorship firm.

Is there any minimum requirement to start a sole proprietorship?

No, there is no minimum requirement to start a sole proprietorship in India.

How long does the sole proprietorship exist?

The sole proprietorships exist as long as the proprietor is alive and is desiring to run the business.

Is the owner of the sole proprietorship considered to be the same as the sole proprietor?

Yes, a sole proprietor is considered to be the same as the sole proprietor.

What are the licenses required to register for sole proprietorship company?

It generally differs from state to state as in Maharashtra a Shop and Act license is required and for West Bengal, the trade license is required.

What is the role of the proprietor in sole proprietorship?

The proprietor owns, controls, and manages the sole proprietorships. He has a complete hold over the proprietorship.

Can I get PAN card for sole proprietorship?

No, PAN card cannot be obtain for proprietorship. Proprietorship PAN card will be the same as proprietor PAN card. There is no separate PAN card for proprietorship business.

Can I open bank account in proprietorship business name?

Yes, proprietorship current account can be opened in the name of the business. However, for all legal and official purposes – the PAN card of the proprietor will be used. Hence, the ultimate owner and operator of the proprietorship bank account will be the proprietor.

Can I operate a proprietorship from my house?

Yes, you can operate a proprietorship business from your house as long as it complies with other regulations that maybe applicable for your business.

What is the address proof for proprietorship?

Any official document that has the name of the proprietor, photo and address like driving license or passport can be used as address proof for proprietorship. In addition to the above, a utility or EB bill in name of proprietor can also be submitted

What are the mandatory licence to be obtained for a sole proprietorship?

The licenses and registrations for a sole proprietorship will vary depending on the type of business activity.

Is GST registration mandatory for a sole proprietorship?

No, GST registration is not mandatory for proprietorship. However, it is recommended that all proprietorship be registered under GST and have UDYAM registration to undertake various business activities.

What is a sole proprietorship?

Proprietorships in India are a type of unregistered business entity that is owned, managed, and controlled by one person. The micro and the small businesses that are operating in the unorganized sector prefer getting registered as Sole proprietorships.

Who can get sole proprietorship?

An Indian Citizen with a current account in the name of his/her business can get a registration.

How long does it take to register a sole proprietorship in India?

It takes around 8 to 10 days but is subject to government processing and document submission.

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