Proprietorship Formation


Start your business in proprietorship easily and fast. It has never been so easy than to make a proprietorship in 2018. There is no registration required to start a proprietorship firm, however, tax registration like GST, TAN etc are mandatory. Banks also insist for two KYC document in the name of the proprietary firm, our Basic Pack takes care of the same.

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A proprietorship is the simplest form of business in which enterprises can start, Only one person invests entire capital in the firm, and he alone is entitled to the profits of the business. For a Proprietorship Firm, there is no registration as such, and it starts at the will of the proprietor/owner without obtaining any certification. However, registration with Goods and Services Tax (GST for Proprietorship Firm) and obtaining TAN number for complying with the TDS related provisions of the Income Tax Act is desirable and necessary. Bankers also insist for two KYC documents in the name of the firm to open a Current Bank Account in the name of Proprietorship Firm. We are available to assist in the registration of proprietorship firms all over India.

Proprietorship Firm Registration

Key Points On Proprietorship Registration

Start Immediately


A proprietorship can start immediately at the will of the proprietor and obtain GST Registration within 30 Days of starting its operations.

NO Foreign Direct Investment (FDI) in Proprietorship


A proprietorship cannot be funded with foreign money (No FDI) and it can be owned by only Indian citizens and NRI with some conditions.

Proprietorship tax benifit


The income of the proprietorship is included in the income of proprietor itself. Hence slab based tax rates apply resulting in tax benefit.

Proprietorship Easy to Strat Easy to Close


A proprietorship can be closed easily, all you have to do is to surrender all registrations and licenses obtained in the name of proprietorship.

Stepwise Procedure to Start a Proprietorship Business
Name Of Proprietorship
Selection of Name

The name of the firm should be checked with the trademark registry in India to avoid any infringement of Trademark.

Tan Number Allotment For Proprietorship
TAN Number Allotment

To comply with the provisions of TDS TAN number is needed. TAN is a unique number allotted by the Income Tax Department.

MSME Registration for Proprietorship

Udyog Aadhar enables an entrepreneur to seek online services offered by ministries & departments of the govt.

GST Registration for Proprietorship
GST Registration

GST is levied on the supply of goods or services & to comply with it, every eligible business needs to register under GST.

Documents required to register proprietorship firm


Our Professional Service Fee For Proprietorship Formation in India


Rs. 2,499/-

  • Consultancy on Formation
  • TAN Number Allotment
  • Udyog Aadhar Registration
  • GST Registration


Rs. 8,999/-

  • Everything from Basic Pack
  • Bank A/c Opening Support
  • Trademark Public Search
  • One Trademark Filing in India


Rs. 14,499/-

  • Everything from Silver Pack
  • Digital Signature of Proprietor
  • Tax Planning Session with Expert
  • First Year Income Tax Return Filing

List of Documents For Company RegistrationDocuments Required For Proprietorship Formation


  • Premises Proof Where the office of proprietorship is situated
  • No objection certificate from the owner of premises
  • Premises proof should not be older than two months

FOR PROPRIETOR (Owner of the Proprietorship)

  • Two photographs of Proprietor
  • Self-attested copy of PAN Card
  • Identity Proof (Passport, Aadhar, Voter Id, Driving License)
  • Address Proof (Bank Passbook, Electricity, Gas or Telephone Bill)
  • A canceled cheque of the proprietor bank account.

2018 Company Registration.


Multiple Lines - 9 AM to 9 PM (365 Days in a Year)


What is the difference between Proprietorship and Other Forms of Business ?

We have prepared a detailed and easy to understand comparative table showing availability of features and advantages of one form of business to that of others. The same can be found at the end of this page. Click here to learn more.

What is the minimum amount of capital required to start Proprietorship Firm?

A proprietorship business can be started with any amount of capital and as such, there is no provision in the law which prescribe any minimum capital for the firm. The capital must be infused by the proprietor based on the nature and scale of the proposed business. You shall have the ability to introduce or withdraw capital at any time from the accounts of the proprietorship business as drawings.

Do I require another person to register a Sole Proprietorship in India?

NO. A proprietorship business is owned and controlled by a sole person. There is no requirement to engage any other person to start a proprietorship business.

Does the proprietor have to be an Indian to start a Proprietorship firm?

Yes. Only an Indian Citizen can start proprietorship business. Similarly, no foreign funding is allowed in a proprietorship form of business. However, an NRI or a Person of Indian Origin (POI) can invest in proprietorship with prior approval from the central government of India.

Under which Government Authority, the application of Sole Proprietorship Firm Registration is submitted?

There is no law which enforces registration of a proprietorship firm as such, SETINDIABIZ helps entrepreneurs in securing registration under MSME, GST, Shops & Establishment, etc. the MSME registration is done under Micro, Small and Medium Establishments Development Act, 2006 of Central Government.

What are the documents required for registration of Proprietorship Firm under MSME in India?

Following are the proprietor documents which are required for registration of firm under MSME.

  • Copy of Aadhar Card
  • PAN card of the Sole Proprietor
  • Details of Business Place

Will my Proprietorship firm have a Certificate of Incorporation or Registration?

There is no certificate of registration or incorporation for proprietorship business as such. The legal identity of proprietorship as an entity is determined through various other registration or licenses obtained in the name of the proprietorship firm on the case to case basis. Similarly, each specific registration shall result in the issuance of a certificate of registration, for example, GST Certificate, MSME Registration Certificate, Tan Allotment Letter, etc.

How to open a bank account for a Proprietorship?

The opening of Bank Account is regulated by the Reserve Bank of India, which have prescribed submission at least two entity proof for the proprietorship. To open a bank account, you may approach any bank nearest to you, and generally, they need following documents.

1. List of Entity Proof of Sole Proprietorship: (Any two documents from the below list)

  1. Certificate of Registration with MSME
  2. GST Registration Certificate
  3. Registration with Shops & Establishment
  4. Registration or License-related to Central-State govt.
  5. Certificate related to Municipal authorities
  6. Tax returns Showing Name of Proprietorship Firm
  7. Import Export Certificate in Firm Name
  8. CA certificate for Existence of Entity
  9. Registered lease/ license in Proprietorship Name
  10. Utility Bills/ TDS certificate in the name of the firm

2. Identity Proof of Proprietor for Bank A/c Opening:

  1. PAN Card
  2. Driving Licence
  3. Passport
  4. ID cards issued central & state govt.
  5. Passbook scheduled commercial bank
  6. Marriage certificate
  7. Voters ID card
  8. Aadhar Card

3. Address Proof of Proprietor

  1. Driving Licence
  2. Passport.
  3. ID cards issued central & state govt.
  4. Passbook scheduled commercial bank
  5. Utility Bill
  6. Marriage certificate
  7. Municipal corporation bill
  8. Credit Card Bill
  9. Registered Leave and Licence Agreement
  10. Bank statement

Can I later convert my Proprietorship into a Company or LLP?

Yes, the proprietorship can be converted to LLP or Private Limited Company


Check advantages and disadvantages of Common Business Entity Types

  • ▼ Separate legal entity
    • A Company is a separate legal entity separate from its promoters
    • An OPC is a separate legal entity separate from its promoters
    • An LLP is a separate legal entity separate from its promoters
    • A Partnership is a legal entity but not different from partners
    • The proprietor and the proprietorship business is the same thing
  • ▼ Limited Liability
    • Shareholders of a Company are bound to pay only up to the capital they have subscribed to the company.
    • In OPC, unlike a proprietorship, the shareholder cannot be asked to pay beyond his subscribed capital
    • The partners of an LLP can be called upon to pay only up to the amount of capital they subscribed to.
    • There is no protection of limited liability, even the personal properties of partners are at risk for losses of business
    • The proprietor is the whole sole of the business, and his liability to the debts or losses of proprietorship is unlimited.
  • ▼ Number of members
    • A Company can be opened with at least two person. However, the maximum number cannot be more than 200
    • In case of OPC, Only one person can be a shareholder. He would be required to appoint a nominee.
    • With two partners an LLP can be incorporated, there is no limit on the maximum number of partners
    • A Partnership firm can start with a minimum of two partners, the, however, the maximum number is capped at 20
    • Only one person is required for proprietorship, also known as proprietor.
  • 2 - 200
  • 1
  • 2 - unlimited
  • 2 - 20
  • 1
  • ▼ Number of Directors /DP
    • A company can be opened with at least two and maximum of 15 directors. The same person can be a shareholder as well as director
    • At least one person must be appointed as director of the company. The shareholder and director may be the same person
    • The minimum two designated partner is required in an LLP & there is no limit to the maximum number.
    • There is no separation of ownership and management in case of a partnership. All partners are equally responsible for the conduct of business.
    • In case of proprietorship, the proprietor is solely responsible for the conduct of business.
  • 2-15
  • 1-15
  • 2 to unlimited
  • Not Applicable
  • Not Applicable
  • ▼ Foreign Investment (FDI)
    • Foreign Direct Investment in case of a Private Limited Company is available under the automatic route.
    • FDI is not allowed in One Person Company
    • FDI in LLP Is permitted subject to prior approval from the central government
    • FDI is not allowed in Partnership Firm
    • FDI is not allowed in proprietorship Business.
  • ▼ Ownership Transferability
    • The shareholding of a Pvt Ltd Company is easily transferable
    • OPC Shares can be transferred to new shareholder along with the nominee
    • In LLP share of a partner can be transferred with the consent of all other partners.
    • Not Possible, every admission or removal of partner amounts to the new firm.
    • Not Applicable
  • ▼ Perpetual Existence
    • A Company exists beyond the life of its owners /shareholder. After the death, the shares transmits to legal heirs
    • OPC Continues to exist even after the death of its only shareholder, as it passes to the nominee.
    • The LLP also have perpetual existence and exists beyond the life of the designated partner
    • No perpetual existence, with the death of a partner, the partnership ends.
    • No perpetual existence, with the death of the proprietor, it ends.
  • ▼ Tax Benefits
    • The company tax rate is flat at 25% on its profits
    • The company tax rate is 25% on its profits
    • LLP Income Tax Rate is 30% on its profits
    • Partnership firms are taxed at 30% on its profits
    • For a small business with low turnover, there is the benefit of individual tax slabs
  • Effective
  • Effective
  • Low
  • Low
  • Good
  • ▼ Statutory Compliances
    • The company is required to file an annual return, balance sheet to ROC and ITR around the month of September
    • OPC is required to file an annual return, balance sheet to ROC and ITR around the month of September
    • LLP have to file an annual return in form 11 and financial statement in Form 8 and ITR
    • Only ITR is to be filed
    • ITR is required to be filed if the taxable income is more than 2.5 Lac
  • High
  • High
  • Low
  • Minimum
  • Minimum
  • Formation Cost
  • 1,999/-
  • 1,999/-
  • 1,999/-
  • 4999/-
  • 2,499/-


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Jayanta Das

Jayanta Das

Director, Primero Skills & Training Pvt. Ltd.

We have been availing your services for over four years now. We are extremely satisfied with the way solutions are provided in matters, whenever, we sought professional help. We cherish the association and look forward for similar experience in the years to come .

Vivekananda Sinha

Vivekananda Sinha

Director, FIH Business Services Pvt. Ltd.

We started with Private Limited company incorporation. We are taking your services for the last 3 years, and have an amazing service experience with the team. Smooth workflow, everything is completed on time with details & perfection.