Proprietorship Firm

SMCAs a proprietorship Firm, main purpose of the firm is opening a current bank account on the name of business. So basically most of the banks ask for any legal certification for the business.

a) Business in Service Industry

b) Sales Business

a) Business in Service Industry - This type of Business is providing services as an Online and Offline to users. Example are - Website Development/Digital Marketing/Consulting/Ecommerce Marketplace/Marketplace Business Models/Tickets and Hotel Bookings/Classifieds Websites or any other type of business which providing the services. So as a Service Based Business required two things open a current account.

* Service Tax Certification

* CA Certificate regarding nature of business.

b) Sales Business - This is type of Business is selling any product to customers through online or offline. Like- Ecommerce Website/Importer/Exporter/Selling on Ecommerce Marketplace Flipkart/Snapdeal or trading from your Shop.

Common Documents Required in Both above cases register as Proprietorship Firm :-

  • * ID and Address Proof as Pan Card with Passport/Voter ID/Aadhar Card/Driving License of the concern person.
  • * Firm Address proof.
  • *if Property on Rented :- Require Rent Agreement with NOC from Landlord.
  • * For Sales Tax : - Needed Security, Amount based on the state in that state sales tax Registration.

Note : Some State that Surety is not applicable like in Delhi but in other State its applicable. Amount will vary on state wise.

Key Features of Proprietorship Firm

  • * 1 Person Required as Single Entrepreneur.
  • * Single Owner of the Business.
  • * Easy to Start and Easy to Close.
  • * Complete Control.
  • * Lower Cost of Formation and Compliance.
  • Disadvantages of Proprietorship Firm

  • * Lack of Resources.
  • * Unlimited Liability.
  • * Lack of Credibility.
  • * Can not raise funds easily.
  • * Can not add Partners.