A Proprietorship Firm is wholly owned, managed and controlled by an individual called proprietor. Proprietorship Firm is the easiest way of doing business and have minimal regulatory compliance. Proprietorship Firm Registration needs not to be registered with any specific authority. However, Sole Proprietor can obtain the MSME Registration/ Udyog Aadhaar to avail various benefits available to Micro Small and Medium Enterprises.
For a Proprietorship Firm Registration, there is no need to take separate registration. Moreover, there is no procedure for obtaining name approval as in case of Companies. Also Government has not provided any mechanism to form the proprietorship firm.
Proprietorship firm Registration can be initiated by just obtaining the Trade Licence, MSME Registration or opening a bank account with the firm name. Separate Income Tax PAN is not required in the name of Proprietorship firm. The proprietorship files the Income Tax return with the PAN of the Proprietor. Further, all other registration like Goods and Service Tax (GST) Registration will be in the name of the Proprietor. Hence, in Proprietorship, the Sole Proprietor is personally liable for all acts.
Advantages of Proprietorship Firm:-
1. Ease of Formation
2. Ease to Operate
3. Minimal Compliance
4. Easy to Close