Proprietorship Firm Registration in Delhi: Process, Legal Obligations, and Taxation Compliance

Try the guided procedure for the Starting A Proprietorship Firm Registration in Delhi which covers the process of picking a business name to obtain required licences and approvals. Be knowledgeable of taxation compliance, legal obligations as well as the ones required to be used in registration. Taxcellent offers a personalized service to help business owners move through the process of setting up a business and ensuring on-time taxation compliance in just 7 days.

1. Basic Understanding of Proprietorship Firm:

A proprietorship firm is the simplest and easiest form of business entity owned and operated by a single individual The proprietor is personally liable for all the debts and obligations incurred by their business.

2. Procedure for proprietorship registration

1. Select a Business Name: Choose a unique and suitable name for your proprietorship firm.
2. Name not selected by other business: One must ensure that the chosen name complies with all the applicable local rules & regulations and it is not already in use by another business.
3. Don’t use any offensive or misleading terms/words in the business name.

3.  Determine the Nature of Business:

• One must be clear about the nature of business activities, products, or services that will be offered at the time of operating the business.
• Identify the target market and potential customers for the business.

4.  Obtain Necessary Licenses and Permits:

• One can register their proprietorship business by obtaining a GST license & should apply for a trademark so that no one can use it.
• Identify any licenses or permits required to legally operate your business in your city/state. In order to conduct online business in India on Amazon, Flipkart and other online websites, GST is For conducting restaurant business FSSAI license is mandatory.
• Common licenses may include GST registrations, trade licenses, FSSAI, trademarks, professional tax registration, and any industry-specific permits. The taxcellent team also helps you to obtain GST registration, FSSAI license, professional tax registration and other applicable registrations.
• Connect with the relevant local authorities or government departments to obtain the necessary licenses and permits for starting a business.
• In many states, registration of the business name is not mandatory for a proprietorship firm. However, one should register their business name to protect it from being used by others.

6.  Obtain GST Registration (if applicable):

• If your annual turnover exceeds the threshold limit set by the government, you must obtain GST registration for your business
• A person can also obtain GST registration voluntarily for business
• Visit the GST portal and follow the registration process by providing the required details and documents.
• Taxcellent team also helps you to obtain GST Registration in Delhi.

7.  Open a Current Account in the Bank:

• Once GST registration is obtained, you can open a current account with the Bank for your proprietorship business to manage the business.
• Visit a bank branch or apply online to open a current account in the name of your business. Taxcellent team also helps you to open a current account.
• Provide the necessary documents, such as proof of identity, address, and business registration (if applicable) as required by the respective Bank.

8.  Maintain Proper Financial Records:

• Maintain books of account on a day-to-day basis for every financial year and prepare financial records of business transactions, including income, expenses, assets, and liabilities.
• Maintain separate records for personal and business finances to comply with accounting and tax regulations.

9.    Taxation Compliances:

• Ensure compliance with all applicable taxation requirements which includes filing of GST returns on a monthly/quarterly basis, payment of GST, payment of advance tax, payment of TDS, and filing of Income Tax Returns.
• File your income tax returns and GST returns within the specified due dates to avoid Interest, penalties or fines.

10.  Have an understanding in relation to Legal Obligations:

• As a proprietor, a person is personally liable for all debts, obligations, and legal liabilities of the business.
• One should be cautious of their legal responsibilities and should take all the precautions to mitigate risks in order to protect their personal assets.

11.  Seek Professional Advice:

• Seek advice from legal, financial, or business professionals to comply with all legal and regulatory requirements.
• Consult with Taxcellent team who provide online CA services in Delhi India/ Chartered Accountant- Related Services in Delhi for guidance on tax planning, legal documentation, and business strategy.

12.  What documents are required for proprietorship firm registration in India?

The whole process of registering the proprietorship can be completed online. Please refer to the documents required for registration: –

1. Identity proof – PAN Card, Adhar Card, Voter ID
2. Address proof – Passport or bank statement
3. Passport-size photos of the Assessee
4. Ownership proof of the premises, if the premises is owned
5. Rent agreement and No objection certificate from the owner if premises is on rent for GST registration
6. Electricity Bill/ any other utility bill, not older than two months
7. Any other documents if required will be communicated to you

13.  Mandatory Compliance for Sole proprietorships Firms after incorporation in India

1. Audit for Proprietorship

An audit will be required for the proprietorship firms if the total sales are over Rs. 1 crore during the financial year subject to certain other applicable turnover limits. In a professional case, an audit is necessary if the total gross receipts are more than Rs.75 lakhs during the financial year assessment. Further, any person opting for a presumptive taxation firm is also required to get their accounts audited irrespective of their turnover if the income claimed is lower than the deemed profits and gains under the scheme.

Audit for Proprietorship for income tax purposes must be conducted by a practising Chartered Accountant

1. Income Tax Return Filing

Any person registering a proprietorship must Online Income Tax Return Filing in Delhi. As the proprietor and the proprietorship are the same, therefore the proprietor is required to file a single income tax return,

As per the provision of the Income-tax Act 1961, every proprietor below the age of 60 is required to file an ITR if the total income exceeds INR 2.5 lakhs. If the proprietor is over 60 years old and below 80 years old, he/she should file ITR only if gross total income exceeds INR 3 lakh. Proprietors over the age of 80 years are required to file income tax if the income exceeds INR 5 lakh.

Form ITR-3 can be filed by a proprietor or a Hindu Undivided Family carrying out a proprietary business or profession. Form ITR-4-Sugam can be filed by a proprietor who would like to pay income tax under the presumptive taxation scheme.

Taxcellent assists you in Proprietorship Firm Registration in Delhi business within 7 days along with proper tax guidance.

Taxcellent- Your Tax Partner