A sole proprietorship is a type of unregistered business entity that is owned, managed and controlled by a single person. Sole proprietorship’s are one of the most common forms of business in India, used by most micro and small businesses operating in the unorganized sectors. Proprietorship’s are quite easy to start and have a few regulatory compliance requirements for starting and operating. However, after the startup phase, they do not offer the promoter many benefits such as limited liability proprietorship, corporate status, separate legal entity, independent existence, transfer-ability, perpetual existence – which are desirable features for any business. Hence, proprietorship registration is suitable only for unorganized, small businesses that will remain small and/or have a limited period of existence.
The Government of India has not provided any mechanism for the registration of a Proprietorship. Therefore, the existence of a proprietorship firm must be established through tax registrations and other business registrations that a business is required to have as per the rules and regulations. For instance, VAT or Service Tax or GST Registration can be obtained in the name of the Proprietor to establish that the Proprietor is operating a business as a sole proprietor. Thus, all the registrations for a proprietorship would be in the name of the Proprietor, making the Proprietor personally liable for all the liabilities of the business.
AK JHA & CO. is the market leader in company registration services in India, offering a wide range of services like private limited company registration, one person company registration, Nidhi Company Registration, Section 8 Company Registration , Producer Company Registration and Indian Subsidiary registration. The average time taken to complete a proprietorship registration is 3 – 5 working days, subject to government processing time and client document submission. Get a free consultation for proprietorship registration and business setup in India by scheduling an appointment with an AK JHA & CO. advisor.