There are many kinds of entities like Proprietary firm, Partnership firm, Limited Liability Partnership, Company etc. Out of them proprietary form of business has many advantages like
- No separate registration required
- Lower cost of compliance than any other form of business
- Early to start
- No need of compulsory audit like Private Limited Company
- Pay Income tax as per slab rates.
- No need to share profit with any other person.
But many young entrepreneurs instead of opting easier proprietary form business end up opting private company form of business and hence end up making payment for higher compliance cost rather than investing the same in business. This article is to help entrepreneurs to understand the ways to start a proprietory form of business.
Following are the steps to start a Proprietary form.
Step 1: Choose a Name for your business.
Step 2: Get MSME registration or GST registration or Laboure license.
(GST registration to be taken only if the Turnover exceeds Rs. 20 Lakhs)
Step 3: Open a Current account in any of the Bank.
Step 4: Get Profession Tax registration.
Voila your proprietary firm is ready to get started.
As discussed above the proprietary form of business can be started in 4 easy steps. Hence it is advisable for the young entrepreneurs to start with proprietary form of business and later move to Partnership Firm or LLP or Company in case required to lower their compliance cost.
Please also reach out to us at firstname.lastname@example.org for any more questions on starting a proprietary firm for your business venture.