I am looking to register my Photography service as a Sole Proprietorship, but I am a bit lost on the proof of address bit. The agreement for my rented home is in my wife's name. Her father (father-in-law) has his own home in a location nearby. I wish to know: 1. If I can get a rental agreement from my father-in-law that states that I'm renting a portion of his house (a room) for my Photography business, will that be okay? 2. If it's legally viable, what should the rental agreement say? Especially since regular rental agreements include a line that says "for residence purpose only". In my case, how should I make the agreement read? P.s. I will not be selling any goods; my service is home-based and I only need an address to register my Photography business.
First answer received in 30 minutes.
Lawyers are available now to answer your questions.
1) the leave and licence agreement
Fou use of one room in father in law
House should be duly stamped and registered
2) mere notarise agreement won't suffice
3) you would need society permission to use premises for commercial use.
4) leave and licence agreement should mention that premises canbe used for commercial purposes
1. Sole Proprietorship does not require registration. You require PAN card number, Service Tax (if applicable) etc. Your PAN card which will be the PAN card of sole proprietorship firm.
2. Since there may be need for license under Shops and License Act, you are free to take on rent a part of your father-in-law's house.
3. The rental agreement has to be commercial in nature as you intend to use the premises for photography business.
4. Get the agreement drafted by a lawyer to prevent subsequent legal hassles.
1) the existence of a sole proprietorship business can be established only through opening a bank account in the name of the proprietorship firm or obtaining licenses required for conducting the business.
2) To open a bank account for a sole proprietorship, RBI’s KYC norms mandate that any two of the following document 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.
1/3 part of the house can be used for commercial activity. execute leave and licence from land lord and register it as a office for LLP in MCA 21 form. permanent address is not needed for registration of LLP. read guidelines given in company affairs ministry and prepare all documents.
As suggested, I shall get a Leave and License Agreement done. From the perspective of my father-in-law, who will be the licensor, what are the implications? 1. How should he declare the income? Should it be done while filing returns? What additional steps does he need to take? 2. What are his cost implications to set up such an arrangement? I, the licensee, and my father-in-law, the licensor, are both laymen in this regard. So, any additional information on how to go about handling the leave and license agreement will be highly appreciated. Thank you.
1) you must get leave and licence agreement drafted by a lawyer .
2) have it duly stamped and regd .
3) period of agreement , rentals , security deposit should be clearly mentioned .
4) income received by your father in law as licence fee should be duly declared by your FIL in his income tax returns .
5)rental income would fall under head income from house property . your father CA would be a better guide on income tax issues .
6) it is advisable to take prior permission of cooperative society before giving flat on leave and licence . in Mumbai atleast prior permission of society is must for giving premises on leave and licence
1. The licensor will be your father-in-law.
2. The income can be declared only in the IT returns.
3. There are no cost implications except for the fees of the lawyer who will prepare the leave and license agreement.
1. Yes, your father in law's renting you the room will suffice. Your wife also can sub ret a room to you for using it for your profession of photography,
2. You can mention in the agreement 'for the use of your profession of photography',
3. You can register you address as stated above for the said purpose of your profession/business.
1. You need an address only to be shown as your business address,
2. It need not be a leave and license agreement. A simple license agreement by which he will give you license to use his one room for business purpose will be enough,
3. In such case he does not have to show any income in his I.T. return.
he will declared income from house property under itr 2, leave and licence is valid for 11 months only and there after it needs renewal. rent shall be included in landlord's income out of house property. if he is in service then he shall be show it in ITR 1 otherwise ITR 2. write all terms on rs 100 stamp paper and get notorised by the notary of district court. it shall binding effect and legal document.