• Start a sole proprietorship

I want to start online portal.

What is the process to create a sole proprietorship?

Do I need to get any business licences to open bank account in the name of the proprietorship? I'm assuming bank needs some documents to open the account in the name of the proprietorship as opposed to a personal account.

If I create the sole proprietorship but I end up not having any profits, do I still need to file taxes?

If I create the sole proprietorship but I end up not having any profits, do I need to "pay" any taxes or recurring fees in that case?

How long does it take to get the sole proprietorship established? (how many days)

Thx.
SW
Asked 2 years ago in Business Law from New Delhi, Delhi
take following steps to start sole proprietorship portal.

1
Develop a business plan. Research your local target market before deciding what type of business you want to set up. It is best to choose a niche market where there would be a demand for the product or service you want to offer.

2
Determine a location and capital requirements for your business. Decide whether you will be working from home or renting or buying your business premise. Ideally, your business should be located within close proximity to your target market. Estimate how much working capital you will need to start your business, ensuring that you have enough cash aside for day-to-day business expen
3
Choose a name for your sole proprietorship business. Ensure that the name represents your business well and does not infringe on any trademark, copyright or patented name or word.

4
Obtain the necessary licenses applicable to your business. The rules for obtaining licenses vary depending on the type of business you are running and local or state laws. Check with your local municipal office to see what licenses may be required. For example, you may need a Shops and Establishment license if you are opening a shop or commercial enterprise, if the laws in your state require it.

5
Open a bank account for your business. While opening an account, you may be required to present a few documents for proof of identity and residence such as your Permanent Account Number (PAN) card, business licenses, a copy of your telephone or electricity bill as address proof and a rental agreement if you will be renting space for your business.

6
Obtain the necessary tax registration. If you are offering a service and your business has an annual turnover of more than Rs.10 lakhs, then you need to register for service tax. If you deal in taxable goods, then you need to obtain a Value Added Tax (VAT) registration. Check on the taxation laws in your state to ascertain which tax registrations you need. For income tax, no separate return needs to be filed for a proprietary concern since all business profits and losses are included in individual tax returns.

7
Promote your business. Set up a website that provides all the relevant information about your business and what you offer. Advertise in local publications, print business cards, brochures and fliers to publicize your business and attract customers.
R.K. Nanda
Advocate, New Delhi
457 Answers
0 Consultations
3.8 on 5.0
Hello,
Sole proprietorship does not require a registration with the  normally.However you will certainly need to obtain licence from the government depending on the nature of your business.For instance it could be service based or otherwise.The licence will help you open the bank account in the name of the propritorship.You will need to get a pan card made in the name of the firm.
Regardless of the profit or loss you will have to file tax returns;the question  of having to pay taxex arises only if you have profit as if you have loss it will reflect in your tax file.
Yes you will be requied to renew your licence as it expires.Apart from this you won't have any recurring charges to be paid.
You need to obtain licences from The federal government ,Your state government and Your local government.
A sole proprietorship offers the least amount of complication in terms of start-up requirements for the different business organizations.

The whole process might take about 15 days.
S J Mathew
Advocate, Mumbai
1950 Answers
65 Consultations
5.0 on 5.0
You must register a partnership deed take licence get a pan card apply for DIN take a Bank account in the name of the firm
Jeshma Mohandas KP
Advocate, Kozhikode
567 Answers
1 Consultations
3.5 on 5.0
Hi,
 Once you set up prepare a proprietorship deed which will specify the name address and style of your business and it will help you to open bank account and get a pan card.  apply for a  Pan card in the firm's name. ,open a bank account and if needed go for a online payment, make  request to the bank to process it .
 You need to get assigned a service tax No. and pay it other than paying income tax 
File your returns whether it is profit or loss , take the help of a CA for service tax as well as filing income tax returns.
Thresiamma G. Mathew
Advocate, Mumbai
1316 Answers
85 Consultations
5.0 on 5.0
1) it is always better to form a company than start business as sole proprietor 

2) please note that you would have unlimited personal liability in case you carry on business in name of sole proprietorship concern . 

3) obtain licence under shops and establishment act . 

4) you would need to open bank account in name of concern . 

5) also need PAN card in name of concern . 

6) you would need to file your income tax returns if income exceeds exemption limit .
Ajay Sethi
Advocate, Mumbai
23291 Answers
1220 Consultations
5.0 on 5.0
To open a Current account in the name of sole proprietary firm, RBI has issued certain guideline regarding KYC for such account.

Know your Customer (KYC) guidelines – accounts of proprietary concerns

A reference is invited to Para 2.4(a) of the Master Circular on KYC/AML/CFT/Obligation of banks under Prevention of Money laundering Act (PMLA), 2002 issued to banks vide DBOD.AML.BC.No.2/14.01.001/2009-10 dated July 1, 2009. It has been advised to banks that internal guidelines for customer identification procedure of legal entities may be framed by them based on their experience of dealing with such entities, normal bankers’ prudence and the legal requirements as per established practices. If the bank decides to accept such accounts in terms of the Customer Acceptance Policy, the bank should take reasonable measures to identify the beneficial owner(s) and verify his/her/their identity in a manner so that it is satisfied that it knows who the beneficial owner(s) is/are

2.  For sake of clarity, in case of accounts of proprietorship concerns, it has been decided to lay down criteria for the customer identification procedure for account opening by proprietary concerns. Accordingly, apart from following the extant guidelines on customer identification procedure as applicable to the proprietor, banks / financial institutions  should  call  for and  verify  the  following documents before opening of accounts in the name of a proprietary concern:

Proof of the name, address and activity of the concern, like registration certificate (in the case of a registered concern),
Certificate/licence 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,
Licence 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, 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.

ii) Any two of the above documents would suffice. These documents should be in the name of the proprietary concern.

4. These guidelines will apply to all new customers, while in case of accounts of existing customers, the above formalities should be completed in a time bound manner and should be completed before December 31, 2010.
Ajay Sethi
Advocate, Mumbai
23291 Answers
1220 Consultations
5.0 on 5.0
1. To start sole proprietorship business in India the Income tax PAN card, Current Bank Account in the name of the business you want to do to be operated by you as Proprietor & Registration with the Government Department where the trading business you want to do is required. 

2. In case the sole proprietorship will be a service providing business the registration for service tax with revenue department will be required, similarly if it is with regard to sale of goods the registration for VAT will be required with the local State government. If the business will be operated from a shop or commercial place then registration for the Shop & Commercial establishment will be required with the local state government. 

3. No written deed is necessary for the Sole Proprietorship Business as the DEED is required only in cases like Partnership firms & in this case there is only one person involved in whose sole ownership the business will be operated, hence no written deed will be required as the purpose of written deed of partnership firm etc is to clearly identify the ownership rights, interests, profits & liabilities to be shared by the various partners in the partnership firm, whereas when only one person is the owner & sole operator of the business then he or she is the only person to enjoy all rights, profits or face liabilities during his or her tenure of running the sole proprietorship business. However if any of the Government Department where the Registration of the business is required seek a written deed of the proprietorship business then one can reduce all the details with regard to the identity of the owner, the nature of business to be carried out, financial, property & other Capital the sole owner contributed, the details of bank accounts to be maintained for the business, the full details of loans or any financial advances taken for the establishment of the business, property mortgaged for this purpose & mode of repayment, nature of accounting, details of the books to be maintained for the accounts, the person/s who will be beneficiary in the event of death of the sole owner etc. 

4. Registration of Proprietorship firm is optional but it is advisable to register because banks normal insist on registration for opening bank accounts in the name of the firm,

5.  In order to protect your Intellectual Property Rights, you should register the trademark of the firm.

6. For online payment, the payment gateway should be the one approved by RBI,

7. IT return will have to be filed by you if your income, after applying all deductions, exceeds the exempted income.
Ashish Davessar
Advocate, Jaipur
18158 Answers
449 Consultations
5.0 on 5.0
1. First give a name to your proprietorship concern,

2. Take up or select a premises from where you will operate phycisally for your online operation and make it the address of your said concern,

3. Print letter head or design a letter head in your computer for your concern,

4. Apply for shops and establishment registration in your letter head,

5. Open a Bank Account,

6. Conduct your business and after some time apply for Sales Tax registration,

7. Apply for PAN No.

8. You shall have to pay sales tax when you sell and collect sale tax from your customer & income tax only when  your business income from the said firm becomes taxable.
Krishna Kishore Ganguly
Advocate, Kolkata
12123 Answers
231 Consultations
5.0 on 5.0
Dear Querist 
my opinion on your queries are as under:

What is the process to create a sole proprietorship?
Opinion: Execute a sole proprietorship deed and Registered with sub-registrar of your area with all the documents.

Do I need to get any business licences to open bank account in the name of the proprietorship? I'm assuming bank needs some documents to open the account in the name of the proprietorship as opposed to a personal account.
Opinion: No there is no procedure for business licence to open the bank account in the name of the proprietorship, registration of proprietor is sufficient to open the bank account.

If I create the sole proprietorship but I end up not having any profits, do I still need to file taxes?
Opinion: no need to paid any tax if there is no profit but you have to informed the authority regarding all the required information as per your business.

If I create the sole proprietorship but I end up not having any profits, do I need to "pay" any taxes or recurring fees in that case?
Opinion: Read as above.

How long does it take to get the sole proprietorship established? (how many days)

its depend on you.
Nadeem Qureshi
Advocate, New Delhi
3534 Answers
130 Consultations
4.9 on 5.0

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