This business structure is favored by individual entrepreneurs for its simplicity, complete control, and minimal regulatory hurdles.
No complex registration process. You can start your business in just a few days with basic identity and address proofs.
As the sole owner, you make all the decisions quickly and independently, without needing to consult anyone.
Fewer legal formalities and lower compliance requirements compared to companies or LLPs, saving you time and money.
While there's no single 'proprietorship registration,' you establish your business identity through a few key government registrations.
Registering as a Micro, Small, or Medium Enterprise provides government recognition and access to various benefits.
A state-specific license required for operating a business from a commercial or residential premise.
Mandatory if your annual turnover exceeds the prescribed limit, and essential for inter-state business.
Opening a current bank account in the business's name is a key step to formalize your operations.
The documentation process is simple and straightforward. You'll need:
Find answers to common questions about starting a proprietorship.
No, there isn't a single registration. A proprietorship is recognized through other registrations like GST, MSME, or a Shop & Establishment license obtained in the name of the proprietor.
The primary disadvantage is unlimited liability. The owner is personally responsible for all business debts, meaning personal assets are at risk if the business fails to pay its liabilities.
Yes, you can hire employees. You will need to comply with labor laws, such as obtaining a Shop & Establishment license and potentially registering for PF and ESI depending on the number of employees.
The income of the proprietorship is treated as the personal income of the proprietor. It is added to their other income and taxed at the applicable individual income tax slab rates.