Majority of Business in India are unregistered with many being functioned as a sole proprietorship firm business. A sole proprietorship is a standout amongst the most easy and slightest troublesome sort of business component to enroll and keep up in India. There is no formal sole proprietorship selection and to start a proprietorship simply PAN number for the Proprietor, certain licenses and capital is required. In this article, we look at the method for confining a sole proprietorship in India. There is no formal methodology in India to select a sole proprietorship, as a sole proprietorship is believed to be a development of the Proprietor. Thusly, the nearness of a sole proprietorship business can be set up quite recently through opening a money related adjust for the proprietorship firm or getting licenses required for driving the business. To open a record for a sole proprietorship, RBI’s KYC norms order that any two of the going with report must be submitted to the Bank:
- Certificate/license issued by the Municipal authorities under Shop & Establishment Act,
- Sales and income tax returns
- CST/VAT certificate
- Certificate/registration document issued by Sales Tax/Service Tax/Professional Tax authorities
- License issued by the Registering authority like Certificate of Practice issued by Institute of Chartered Accountants of India, Institute of Cost Accountants of India, Institute of Company Secretaries of India, Indian Medical Council, Food and Drug Control Authorities,
- Registration/licensing document issued in the name of the proprietary concern by the Central Government or State Government Authority/ Department, etc.
- Banks may also accept IEC (Importer Exporter Code) issued to the proprietary concern by the office of DGFT as an identity document for opening of the bank account etc.
- The complete Income Tax return (not just the acknowledgement) in the name of the sole proprietor where the firm’s income is reflected, duly authenticated/ acknowledged by the Income Tax Authorities.
- Utility bills such as electricity, water, and landline telephone bills in the name of the proprietary concern.
Since, any two of the above documents are required to open a bank account in the name of the Proprietorship, Proprietors typically first obtain any of the above license / registration / certificate first to establish the existence of the proprietorship firm.