Sole Proprietorship Registration
Package Included :
- Business Activity discussion
- Proprietorship name finalization
- GST & MSME Registration Certificate
- Annual Tax Returns
- Accounting and Business Planning
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Overview on Sole Proprietorship Registration?
In India, majority of the businesses are unregistered, which are operated as sole proprietorship firms. A sole proprietorship is the simplest and easiest form of business entity to register and maintain in India. There is no formal regulation for sole proprietorship registration. However, to start certain proprietorship firms, there is a requirement of obtaining business licenses, capital and PAN number of the Proprietor.
Sole proprietorship in India is an extension of the proprietor business and needs no formal procedure for registration. However, now sole proprietorship registration in India can be done only by opening a bank account in the name of the proprietorship firm or obtaining licenses required for conducting the business.
The owner signs the contracts in his or her own name because the sole proprietorship business has no separate identity under the eyes of the law. The owner of the proprietorship has customers who write cheques in the name of the owner. Sole proprietor owners use both their personal and business property/funds, which is not done in the case of partnership firm and company. These firms have bank accounts in the owner’s name. Sole proprietors need no formalities such as voting and conduction of meetings associated with the business. The sole proprietorship can file the lawsuits (and can be sued) in the name of the owner.
Documents for Sole Proprietorship Registration
For registering in sole Proprietorship, the following documents are required:
- Aadhar Card
- PAN card
- Bank Account
- Registered Address Proof
These firms do not require specific registration. But in order to run the business smoothly, they have an option to get registered under the following:
- GST registration
- Registered as MSME
- Register under Shop and Establishment Act
Other Documents required for the sole proprietorship entity are as follows:
- License/ Certificate issued by Municipal Authorities
- CST/VAT certificate
- Income tax returns documents
- Certificate issued by Service Tax/ Sales Tax /Professional Tax authorities
- Certificate issued by Food and Drug Control Authorities, Indian Medical Council
- IEC (Importer Exporter Code) issued to the proprietor owner by the office of DGFT
- Utility bills such as water bill, electricity bill and landline telephone bills in the name of the proprietor owner
Sole Proprietorship Registration Process
Comparison among Sole Proprietorship Firm /OPC / Partnership
COMPARISON | PROPRIETORSHIP | OPC | PARTNERSHIP |
Applicability | There is no specific Act for the governance of sole proprietorship. | The OPC is incorporated under the Companies Act 2013. | The Partnership firm is registerted under the Partnership Act 1932. |
Minimum Capital | There is no specific minimum paid-up capital is required. | Earlier minimum paid-up capital was Rs 1Lakh After the amendment in 2015 there is no minimum capital required. | There is no minimum paid up capital. |
Number of members | A single person can start the business of sole proprietorship. | In OPC, only one member is required. It is necessary to appoint a nominee. | The minimum two members required which can be extended to 50 members. |
Inheritance of Entity | No separate legal entity nor having perpetual succession. | The OPC also has the separate legal entity but requires the nominee at the time of incorporation. | The partnership firm has no perpetual succession. |
Liability | There is a personal liability of the owner. | The liability is limited as have a separate identity from the owner. | The owners have personal liability at the time of dissolution of the firm. |
Advantages of Sole Proprietorship Registration in India
The following are the advantages of the Sole Proprietorship in India:
- The Proprietorship firm does not need any compulsory registration.
- It is easy to start a new business without engaging in any formalities.
- It has a minimum compliance requirement.
- It does not require any audited statements with MCA each year
- The proprietorship with the income of less than 2 lakhs does not require to pay the income tax.
- A single person can start a business of proprietorship.
- There is a low capital requirement as it depends upon the owner and his will.
Compliances required for Sole Proprietorship Registration
The following compliances for the proprietorship firm registration
- TDS Return Filing
- Filing Income Tax Return
- GST Compliances
- Drafting of Financial Statements
- Tax Audit Compliance
- Documentation of invoices of sales and purchases
Why choose Enterslice?
- Enterslice helps in providing various services regarding the registration process.
- While helping in sole proprietorship registration, we fill the form on behalf of our client and help in submitting the documents.
- We keep track of the whole process and continue to guide for helping our clients
- We maintain high touch communication with our clients and promptly reply to them.
- For us, security is paramount
- We are committed to quality work
- We help our clients with support to solve business problems and to ensure continuous networking of your business.
- We provide instant response to requests in guaranteed time duration.
- We have a wide spectrum of skilled and experienced experts and provide affordable hosting solutions, friendly knowledge support and ensure you a successful online presence.
- We at Enterslice also help our clients after post incorporation compliance services.
Frequently Asked Questions
There is no proper procedure for the winding up or closing of the sole proprietorship business in India. Only once the closing is done by the proprietor he has to inform the employees working in the sole proprietorship firm.
The business of the sole proprietorship requires limited capital investment, less compliances and a single person who is the proprietor can start the business whereas in the partnership firm the registration is required with a more capital and it is necessary requires minimum two persons to start a partnership firm.
The advantages of sole proprietorship business are limited capital investment, less compliances and one person who is the proprietor can start the business. There is no compulsory registration required for proprietorship business.
The assets of the business are mentioned on the left side of the balance sheet , while liabilities and owners equity appears on the right side of the balance sheet.