—Proprietorship
Starting a Proprietorship in Karnataka: Shops and Establishments, PT and Trade Licence
The registrations a proprietor in Karnataka typically needs: Shops and Establishments, Professional Tax, trade licence, GST, and Udyam.
A proprietorship doesn't need incorporation, but it does need the right registrations — and in Karnataka, several of those are state and local. This guide covers what a proprietor in Karnataka typically needs.
Shops and Establishments Registration
Offices and shops register under the Karnataka Shops and Commercial Establishments Act with the Labour Department. It's one of the documents banks commonly accept as proof of your business for a current account.
Professional Tax
Karnataka levies Professional Tax. As a proprietor, you enrol and pay PT for yourself, and if you employ staff, register as an employer to deduct and pay PT on their salaries.
Trade Licence
In Bengaluru, from the city corporation (formerly BBMP, now restructured under the Greater Bengaluru Authority); elsewhere, from the local municipal body. It's tied to your premises and usually renewed every year.
GST
Register for GST once your aggregate turnover crosses the threshold. In Karnataka, the threshold is ₹40 lakh for goods and ₹20 lakh for services. Register earlier if you make inter-state supplies of goods or sell through e-commerce platforms.
Udyam
Udyam registration is free and gives you MSME status, with protection on delayed payments and access to the Karnataka Micro and Small Enterprises Facilitation Council.
Sector Licences
- Food businesses: FSSAI registration or licence.
- Pharmacies: drug licence from the state drugs control authority.
- Importers and exporters: IEC.
Bank Account
With two registrations in the business's name — for example, Shops and Establishments and Udyam, or GST — you can open a current account in your trade name.
A Checklist for Proprietors in Karnataka
- Register under the shops and establishments law.
- Enrol for Professional Tax.
- Get a trade licence from your local body.
- Register for GST when you cross ₹40 lakh for goods or ₹20 lakh for services, or earlier if required.
- Get Udyam registration.
- Open a current account in the trade name.
Getting Help
Think Filing sets up proprietorships in Karnataka with all the state and local registrations they need.