Legal Question in Business Law in India

15.02.2015

Dear Sir / Madam,

Governing law � A proprietorship business is not considered to be a separate and independent entity from the Owner. and it is treated same as the sole proprietor (Owner) of the business in the eyes of Law.

Taxation - The Income Tax Return (ITR) is filed for the sole proprietor owner as an Individual, and are not separately filed for each of the sole proprietory business(es) of the Owner. If you are an Owner of more than 1 sole proprietory business, incomes or losses from all such sole proprietory business is clubbed together, to arrive at a single figure titled Gross Taxable Income of the Sole Proprietor and then Income taxes are calculated. The Income Tax rates applicable are Individual Tax rates for Individual Assesses and not business tax rates.

KYC Norms � RBI (Reserve Bank of India) has now directed all banks to follow the KYC norms (know-your-customer norms) strictly, before opening a bank account. Proprietorship business should have at least 1 or at times 2 valid registrations with any government authorities before they can open a new bank account. These registrations should be in the name of the sole proprietor's business(es), and not in the name of the individual proprietor.

You can be a sole proprietor of many businesses. Yes, you can open a CURRENT A/c in any scheduled, private or co-operative bank in the name of Sumit Paints, by fulfilling and completing the Bank's above enlisted Know Your Customer (KYC) procedure and norms.

You will need to register with Director General of Foreign Trage (DGFT) and obtain an Import-Export Code (IEC). If the Bank where you intend to open a Current A/c insist on 2 registrations, being an artist, you can register your sole proprietorship Sumit Paints with the Artists Guild of India.

Regards,