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How to register a sole proprietorship firm in India?
28-Feb-2023 (In Corporate Law)
How to register a sole proprietorship firm in India?
If you wish to start a new online or offline business with sole proprietorship, your primary objective should be to open a current bank account. Most of the banks ask for any legal certification for the business in order to open the account. Since, the entire registration procedure is lengthy and involves a lot of legal technicalities in terms of certifications etc, it is best to consult a legal expert in this regard.
There are different procedures that you need to follow as per the kind of business your firm will deal in:
a) In case of Services Based Business, that provides online or offline services of any kind like consulting, e-commerce marketplace, digital marketing etc. In these kinds of businesses you will need two things to open an account:
There are different procedures that you need to follow as per the kind of business your firm will deal in:
a) In case of Services Based Business, that provides online or offline services of any kind like consulting, e-commerce marketplace, digital marketing etc. In these kinds of businesses you will need two things to open an account:
- Service Tax Certification
- MSME Certification or Chartered Accountant Certification regarding nature of business. (Required by some private banks)
b) In case of Product/Manufacturing/Sales Business, that sells products to customers through own website or offline. If the products sold are VAT applicable products then your firm falls under this category; for example: e-commerce website/importer/exporter/selling on e-commerce marketplace i.e. Flipkart/Snapdeal or offline trading businesses. In these kinds of businesses you will need minimum two of the below mentioned things to open an account:
- Shop Act license or Trade license
- MSME Certification
- CA Certification
- VAT/Sales TAX/TIN Registration.VAT registration procedure varies from state to state.
Common documents required in both cases to register a Proprietorship Firm are:-
- ID and address proof as PAN Card/Passport/Voter ID/Aadhar Card/Driving license copy of the Proprietor.
- One business place address proof :
- If property is rented: - Rent agreement and NOC from landlord.
- If property is own: - Electricity bills or any other address proof.
- For VAT: You need some security amount as Fixed Deposit or minimum two sureties of dealers which are already registered in that state VAT Registration.
Further, there could be few more requirements that you may need to fulfil from time to time to make your firm legally sound to function in India. Therefore, it is recommended that you take help from a legal expert because most of the times, laws and procedure vary from state to state and time to time.
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Adv. Siddhant Sharma
Delhi | 200+ Answers
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