Proprietorship is owned and governed by one person, usually a shop owner, merchant or a small trader. It’s the easiest way to start a business with easy setup, complete control and minimum compliances. This type of business can be started in 15 days and hence makes it one of the most popular kinds of business to begin. In this structure, the owner and the business are treated one and the same. The proprietor is personally liable for all business debts i.e his personal property may also be used to repay business debts. Register a Proprietorship for your business.
Documents of Proprietor:
Proprietorship has very minimal compliance requirements. Proprietorships are not required to file any audit or taxation reports apart from ITR, unless their turnover crosses Rs 1 cr.
Proprietorship does not give a limited liability protection to its owner and does not have perpetual existence. The structure does not allow for external investments from Angel Investors, Venture Capitalists or Private Equity Firms.
Your registered office need not be a commercial space; it can be your residence too. A recent copy of the utility bill and an NoC letter from the utility bill owner to use the address for company incorporation should be submitted.
The incorporation process is completely online, so you don’t have to visit any place and can get the company registered from anywhere.
The proprietor must be an Indian resident. NRIs and foreign nationals can only invest in a proprietorship, that also, with prior approval of the Government of India. If you’re looking for such a route, refer to One Person Company.
Most local businesses like groceries, fast-food stores, small traders and manufacturers are run as proprietorships. We do not recommend running larger businesses as proprietorships.
It is very common for sole proprietors to convert into partnerships or private limited companies at a later stage of their businesses. For such conversion, refer to the compliances for business change.