bhaskar (Consultant) (87 Points)
11 November 2015Sir/Madam
My client has a small retail shop dealing in textiles.The turnover is close to 15 lakhs. He wants to apply for a loan, for which the bank asked for firm registraion. He wants to know which one will be beneficial to him.
1. Sole proprietor firm
2.Partnership firm
Dev Patel
(Student CA Final )
(513 Points)
Replied 12 November 2015
His has to opt for the private limited company. its benefical for the loans or else go for the proprietorship firm. in the pvt ltd comany they can raise also equity based funding. To know about Checkout How to Register a Proprietorship Firm in India
shivaji prasad bhimavarapu
(CHARTERED ACCOUNTANT)
(2391 Points)
Replied 16 November 2015
The turnover of your client is close to Rs.15 lakhs and as you said it is a small retail shop in textile. For taking loan from banker, if he is running the business as a proprietor, he can obtain " Trade Licence" from the local municipal authorities. He can also obtain " Labour Licence" from conccerned labour department of the local area. ANy one of these two or both will serve the purpose. But remember these are to be renwed pediodically. You can file IT returns as well. If he is already running the business as a partnership firm, take the partnership deed and file Form No.1 under Partnership Act alongwith other papers like, rent deed, photos of the partners etc., depending upon the state the business is located ( the procedures and stamp duites change from State to State). In case of further assistance, feel free to contact
CAclubindia
