Business Mantra: Faridabad
Business Organizations are of different types. Among them Proprietorship firm is the simplest form because it is very easy to set up. A Proprietorship firm is the best option if you want to startup or run a small business as an individual whether it is online or offline. As the business grows, proprietor has an option to get it converted into LLP or company.
A Proprietorship firm is an unincorporated business owned by one person and he is known as sole proprietor. It can be started from the day you want. It does not require registration with govt. or any other legal formality, however now for opening a current account of firm in bank, one registration is necessary to fulfill firm’s KYC requirements. List of such registrations is given below under the heading “How to open a current account of proprietorship firm in Bank”.
As a sole proprietor you can run the business under your own name or under a trade/ firm name or your website’s name. For e.g. let’s say you are an IT Consultant. You can run the business under your own name “ABC, IT Consultant” or under a trade/ firm name “XYZ IT Consultants”.
To commence a sole proprietorship form, you will require the following..
- Pan Card of sole Proprietor (Already discussed in previous article: How to apply for PAN card)
- Current Bank Account in the name of sole proprietorship business.
How to open a Current A/c of Proprietorship firm in Bank:-
For opening a bank a/c in the name of firm, following documents are required (Requirements may vary bank to bank.)
- Service Tax registration or sales Tax or Vat registration or shop establishment license or even a land line telephone bill in the name of firm.
For providing services you require service tax registration and for selling goods you will have to get sales tax / vat registration and shop license.
- A letter from C.A regarding the nature of business.
- Letter head with firm’s name and address.
- Stamp in the name of Proprietorship.
- Address proof of the business premises.
- ID & Address proof the Proprietor.