- How many persons are required to start a proprietary concern?
A sole-proprietorship concern shall be set up by an Individual. If more than one person wants to start a business, they have to choose among other options such as partnership firm, limited liability partnership (LLP) or a company.
- Where to register a proprietary concern?
A sole-proprietorship is an unincorporated business entity owned by an Individual. A company or LLP can’t be a proprietor. So, there is no incorporation process for setting up a proprietary concern.
- If there is no incorporation, how to name a company and commence business?
A sole-proprietor can operate business in his name (ex- Manikchand) or under a trade or firm name (ex: Kalpatharu Enterprises or Mahalaxmi and co). One can choose the name of his choice, obtain an entity registration under Profession Tax act or Shops and Establishment act, Service Tax or VAT Act, open a bank account (Current Account) in the name of the entity and commence business.
- What is the tax rate for proprietary business?
The income tax slab applicable to Individual tax payers is applicable to proprietary concerns. There are no separate tax rates applicable to proprietorships.
- Can I get a bank loan for my business?
Yes. A sole-proprietor is eligible to get bank loans for carrying out business, if all other terms and conditions of loan are met.
- Can I convert proprietorship to a firm or a company?
There is no enabling provision for converting proprietorship into a firm, LLP or a company. So, if one has to take another or additional partners into his business, he has to start a new firm or a company. He can take over the business of a proprietorship, but conversion is not possible.
- Should I obtain a separate Permanent Account Number (PAN) for proprietorship?
As sole proprietorship is an unincorporated entity, there is no requirement for obtaining a separate PAN. The PAN of the owner (individual) is to be used for sole-proprietary firm also. While filing income tax return, one has to use Mr……., sole proprietor of M/s ………… concern.
If you are looking for proprietorship registration consultants in Bangalore, please do visit the website of Balakrishna & Co, Chartered Accountant firm, Bangalore.
Find out what other registrations are required for Proprietary Firm:
- Obtaining PAN and TAN Registration
- Profession tax registration – Karnataka
- Registration under Shops and Establishment Act
- Service Tax registration
- Registration under Karnataka VAT
- Obtaining Import Export Code (IEC)
- Who has to register under Employee Provident Fund (EPF)
- Who has to register under Employee State Insurance (ESI)