Thanks to the Kaanoon community, My father(Resident) and I(NRI) have been jointly running small scale rental for few years now. I am in the process of digitizing for convenience and as part of the process learnt that I better get a CIN and that is when I got to know about Sole Proprietorship Firm, etc. My father takes care of day to day activities and we are in a state to shift responsibilities as he is 65+. Initially I was thinking of opening the Sole Proprietorship on his name and eventually transfer(3-10 yrs) it to me, however I am debating on starting with my name to avoid legal implications down the road. My questions are 1) Are there flaws in the above thought process ? 2) I guess NRI can own a sole proprietorship - if this is true, can it eventually be transferred to a OCI holder? 3) Are there general recommendations on dos and don't s before opening a sole proprietorship?
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You can start a registered LImited liability partnership with you and your father as partners
2) later you can add your wife as partner and your father can retire as partner
3) you can start a sole proprietorship if you so desire
4) in a sole proprietorship you have unlimited liability
A sole proprietorship firm's assets would be distributed amongst legal heirs after him. You may open a registered partnership firm with you becoming a silent partner.
1. You can very well start your own proprietorship firm on your name alone.
You can appoint your father as your manager or a representative to take cae of the firm during your absence.
You can even give a Power of attorney deed in favor of your father to look into the business and sign all the papers before the authorities concerned including the rental agreements on behalf of you by this POA deed in his favor.
2. NRI can open the sole proprietorship business in India however that is highly regulated and shall also require prior permission from the government to start.
In other words, if any NRI wants to start a sole proprietorship business, then he shall need to take prior permission from the government first or else he need to invest on non repatriation basis i.e. amount once invested cannot be taken back to the country outside India.
The investment in sole proprietorship business can be divided into three parts:
3. Any investment made by any person resident outside India other than NRIs or PIO’s may make an application and seek prior approval of the Reserve Bank for making the investment in the capital of the firm or a proprietary concern.
dear sir,
1. you can start an LLC where you and your father can be partners
2. Yes, NRI can open the sole proprietorship business in India however that is highly regulated and shall also require prior permission from the government to start. In other words, if an NRI wants to start a sole proprietorship business, then he shall need to take prior permission from the government first, or else he needs to invest on non repatriation basis i.e. amount once invested cannot be taken back to the country outside India.
The investment in sole proprietorship business can be divided into three parts:
3.The sole proprietor has to first apply for obtaining his Aadhar card and PAN card. Scanned photographs address proof, and ID proof are required for obtaining Aadhar and PAN. These two documents are mandatory for opening bank accounts, further registrations and filing Income Tax Returns.
Thank you
- NRIs is not allowed to invest or start a Proprietorship or Partnership or One Person Company in India , and it required approval from the Reserve Bank of India.
- However you can become directors of an Indian company
