Sole Proprietorship Registration

  1. HOME
  2. Business Registration

Sole Proprietorship Registration

Launch Your Dream Business with Ease: Choose GST Wala for Sole Proprietorship Registration!

  • Consultation for sole proprietorship eligibility and business name approval
  • Preparation and filing of registration documents
  • Guidance on tax registration and compliance
  • Support in obtaining licenses and permits
  • Regular updates on registration progress
  • Provision of registration certificate
  • Ongoing compliance support

Online Sole Proprietorship Registration in India

A Sole Proprietorship is a type of business that is owned and managed by only one person and the owner of the business is called a Proprietor. This type of business is the most common form of business that is used in India. In India, you can commence this business with minimum regulatory compliance. However, there is no full-fledged way available to get Sole Proprietorship Registration by the Government of India. Tax Registration & other Business Registration is the correct way to show the legal existence of your proprietary business. Moreover, the business structure as a sole proprietorship company includes individual freelancers, growing start-ups, and settled & creative businesses comprising physical workplaces.

A Sole Proprietorship is a business owned and run by one person, known as the Proprietor. It’s the most common type of business in India, offering a straightforward way to start with minimal regulatory requirements. While the government doesn’t have a dedicated registration process for sole proprietorships, showcasing the legal existence involves obtaining tax registration and other necessary business registrations.

For a sole proprietorship company, individuals like freelancers, budding startups, and established creative businesses with physical offices can easily adopt this business structure. If you’re looking to formalize your sole proprietorship, consider opting for tax and business registrations to establish its legal presence.

What types of businesses in India can be Sole Proprietorships?

Following are the various types of businesses in India that can be Sole Proprietorships:

  • Grocery Shops
  • Fast food vendors
  • Manufacturing businesses
  • Small Traders
  • Repair & Maintenance Services
  • Parlours
  • Boutiques
  • Retail Stores
  • Local Transportation Services
  • Clinical & Medical Management Facilities
  • Tutoring Services and so on.

Benefits of Sole Proprietorship in India

The following are the benefits of Sole Proprietorship in India:

1. Ease of Dissolution

Just like it is easy to start a Sole Proprietorship in India, you can also easily dissolve, sell, or terminate the same because you aren’t required to fulfil any legal formalities like obtaining TDS. Moreover, you can easily sell the assets of the Sole Proprietorship Company or Firm to a person or an association.

2. Very Less Compliance

This type of business can be started very easily by just a single person. There is minimum compliance that needs to be adhered to get it registered. This type of business is economical as it is very less expensive as compared to a Company or LLP.

3. Sole Beneficiary of Profits

One of the main advantages of a Sole Proprietorship is that the owner of the proprietorship is entitled to all the profits getting from the business. Unlike other business structures in India where profits are shared among shareholders or partners, the Proprietor retains complete ownership.

4. Quick Decision

In a Sole Proprietorship, the business owner takes all the decisions and there is no consent required for any other person or individual. Hence, an owner of a proprietorship can normally make quick decisions regarding their business affairs.

5. Complete Control over the Business

The single owner of the Proprietorship will have complete control over the business. The owner will look after all the business aspects. Since only one person is controlling the business, confidentiality can be maintained.

Eligibility Criteria for Sole Proprietorship Registration in India

Following are the eligibility criteria for Sole Proprietorship Registration in India:

  • Applicants must obtain GST Registration for their business
  • Applicant must be a tax-paying citizen
  • Register a Bank Account in the name of Proprietorship.

Checklist for Sole Proprietorship Registration in India

Following is the checklist required for Sole Proprietorship in India

  • PAN Card of the Proprietor
  • Registration under the Shop & Establishment Act of the respective state
  • Registration under GST, if the turnover of the business exceeds Rs. 20 lakhs
  • Bank account in the business name
  • Complete name & address of the business

Documents Required for Sole Proprietorship Registration in India

Following is the list of some basic documents required for Sole Proprietorship Registration in India

Documents of the applicant

  • PAN Card
  • Identity Proof
  • Address Proof
  • Sale Deed or Rental Agreement (in case of Shop & Establishment Act Registration

To open a current bank account, you need to submit the following documents

Documents of the applicant

  • Address Proof
  • Identity Proof
  • PAN Card
  • Existence proof of your business
  • Shop & Establishments Registration

Procedure for Sole Proprietorship Registration in India

In India, a Sole Proprietorship is an easy way to commence a business. There is no legal difference between the business & the owner in the case of Sole Proprietorship. So, there are 3 different ways to register a Sole Proprietorship in India

  • Registering under the Shops & Establishments Act
  • Registering through GST Registration
  • Getting Udyam or Udyog Aadhar under the Ministry of MSME.

Registering under the Shops & Establishments Act

The Shop & Establishment Act allows the Registration of Sole Proprietorship for shops & establishments in India. Under the prescribed law, cafeterias, restaurants, theatres, hotels, factories, commercial facilities, or public entertainment locations aren’t considered shops. Following is the list of premises that qualify as a shop

Following is the list of premises that qualify as a shop

  • If the products are sold either retail, wholesale
  • Services are offered to the customer
  • This comprises offices, sheds, workplaces, or warehouses used in connection with such business whether on the same premises/elsewhere.

Following is the general process of Registration

  • The Labour Department of each state is liable for registering & processing Establishment Acts
  • The registration process is completely handled by an inspector in charge
  • Usually, the District Labour Officer takes charge as the inspector in charge
  • The inspector will provide a form to the owner

The following details regarding the establishment & employer should be included

  • Owner Name
  • Name of the Establishment
  • Business Address
  • No. of Employees
  • The date that the business opened for business
  • Business category
  • The owner of the business should send the application & the registration fees to the inspector in charge within 30 days of establishment
  • The verification process by the inspector takes some days
  • The owner of the business will get the Registration Certificate if the Registration fulfills all the requirements
  • The Certificate must be shown within the premises & renewed periodically

Registering through GST Registration

If you are involved in the exchange of goods & services, you can do Sole Proprietorship Registration via GST Registration. Earlier, Service Tax & VAT Registration was needed & it is now done via GST Registration. It is the best way to get Sole Proprietorship but has some drawbacks. A business registered through this method must fulfill all the GST requirements & after collecting GST from customers, they should file GST Returns. Our experts at GST Wala will help you get GST Registration

Registration through Udyog or Udyam Aadhar Registration under MSME

The MSME issues Udyog Aadhar which are unique identification numbers. A single owner can apply for Udyog Aadhar with the Ministry. Compared to other methods, the Udyog Aadhar is a new method. When a Sole Proprietor registers with the Ministry of MSME, they become eligible for benefits like bank loans, reimbursements & subsidies among other things. They also benefit from getting a unique identity for their Company which is known as Sole Proprietorship Registration. The Registration process of Udyog Aadhar is very simple, our experts will help you with this.

Compliances for Sole Proprietorship in India

The following are some vital compliances for Sole Proprietorship in India

1. Filing ITR

The owner of a Proprietorship will have to file ITR using ITR-3 & 4.

2. GST Return Filing

In case the Proprietorship has GST Registration, GST returns must be filed every month as per the Scheme under which the business is registered.

3. Business Income

Once your Company Name is approved, then the next step is to prepare all the vital documents for Company Registration. At this step, MOnly ITR Forms allow for declaring business income. Hence, all proprietorships will have to file ITR forms to be compliant with the Income Tax Regulations.

4. TDS Returns

If the Proprietorship has employees or purchases products or services beyond a certain threshold, then tax must be deducted & TDS returns must be filed every quarter.

Note: Additionally, various other compliance requirements may be applicable to the Proprietorship based on location & industry

FAQs

A sole proprietorship is a business structure where an individual operates a business as the sole owner and assumes all responsibilities and liabilities.

Some advantages include ease of setup, complete control over business decisions, simplified tax reporting, and direct ownership of profits.

The registration requirements for a sole proprietorship vary by jurisdiction. In some places, registration is not mandatory, but it is recommended to obtain necessary licenses and permits.

Common requirements may include choosing a business name, obtaining licenses and permits, acquiring any necessary certifications, and completing registration forms.

The name should be unique, not infringe on existing trademarks, and comply with local naming guidelines. It can be the owner’s name or a creative name related to the business.

Yes, many sole proprietors use their personal names as business names, such as “John Smith Consulting.”

The registration process typically involves submitting registration forms, providing necessary documentation, paying any required fees, and following the guidelines set by the local government or business registration agency.

Commonly required documents include identification proof (such as a passport or driver’s license), proof of address, and any licenses or permit specific to the business activity.

Yes, there may be a registration fee associated with establishing a sole proprietorship. The fee amount varies depending on the jurisdiction.

No, a sole proprietorship is owned and operated by a single individual. If there are multiple owners, it would be considered a partnership or a different business entity.

While not mandatory, it is advisable to have a separate bank account for the sole proprietorship to maintain clear financial records and separate personal and business finances.

Yes, as a sole proprietor, you are personally responsible for reporting and paying taxes on your business income. Consult with a tax professional to understand your specific tax obligations.

The licenses and permits required vary depending on the nature of your business and your location. Research the specific licenses and permits needed for your industry and comply with all relevant regulations.

As a sole proprietor, you have unlimited liability, meaning your personal assets are at risk if the business incurs debts or legal liabilities.

Yes, it is possible to convert a sole proprietorship into a different business entity, such as a partnership or a limited liability company (LLC). Consult with a legal professional to understand the process and requirements.

The registration process duration varies by jurisdiction. It can range from a few days to several weeks, depending on the local government’s efficiency and the completeness of your application.

Phone
whatsapp

© 2024 GST Wala All Rights Reserved. - Design & Developed By SigmaIT Software Designers Pvt. Ltd.